================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ______________________

                                    FORM 10-Q
(Mark One)
[X]  QUARTERLY  REPORT  PURSUANT  TO  SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE  ACT  OF  1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE  ACT  OF  1934

                FOR THE TRANSITION PERIOD FROM ______ TO ______.

                        COMMISSION FILE NUMBER 333-75899
                             ______________________

                                 TRANSOCEAN INC.
             (Exact name of registrant as specified in its charter)
                             ______________________

              CAYMAN ISLANDS                                66-0582307
     (State  or  other  jurisdiction                     (I.R.S.  Employer
    of incorporation or organization)                   Identification  No.)

            4  GREENWAY  PLAZA                                 77046
              HOUSTON,  TEXAS                                (Zip Code)
(Address of principal executive offices)

Registrants' telephone number, including area code: (713) 232-7500

                             _______________________

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  proceeding  12  months  (or  for such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes   X   No
                                                      ---     ---

     As  of  October  31, 2002, 319,219,486 ordinary shares, par value $0.01 per
share,  were  outstanding.
================================================================================


<PAGE>
                                 TRANSOCEAN INC.

                               INDEX TO FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 2002


                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION
------------------------------

     ITEM 1. Financial Statements (Unaudited)

          Condensed Consolidated Statements of Operations
             Three and Nine Months Ended September 30, 2002 and 2001. . . . . .2

          Condensed Consolidated Statements of Comprehensive Income
             Three and Nine Months ended September 30, 2002 and 2001. . . . . .3

          Condensed Consolidated Balance Sheets
             September 30, 2002 and December 31, 2001 . . . . . . . . . . . . .4

          Condensed Consolidated Statements of Cash Flows
             Nine Months Ended September 30, 2002 and 2001. . . . . . . . . . .5

          Notes to Condensed Consolidated Financial Statements. . . . . . . . .6

     ITEM 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations . . . . . . . . . . . . . . .21

     ITEM 3. Quantitative and Qualitative Disclosures about Market Risk. . . .45

     ITEM 4. Controls and Procedures . . . . . . . . . . . . . . . . . . . . .46

PART II - OTHER INFORMATION
---------------------------

     ITEM 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .47
     ITEM 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . .48


<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS

     The  condensed  consolidated  financial  statements  of  Transocean  Inc.
(formerly  known  as  "Transocean  Sedco  Forex  Inc.")  and  its  consolidated
subsidiaries  (the "Company") included herein have been prepared, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and notes normally included in financial statements prepared
in accordance with accounting principles generally accepted in the United States
have  been  condensed  or  omitted pursuant to such rules and regulations. These
financial statements should be read in conjunction with the audited consolidated
financial  statements  and  the  notes  thereto included in the Company's Annual
Report  on  Form  10-K  for  the  year  ended  December  31,  2001.


                                        1
<PAGE>
<TABLE>
<CAPTION>
                                     TRANSOCEAN INC. AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (In millions, except per share data)
                                               (Unaudited)

                                                                Three Months Ended    Nine Months Ended
                                                                   September 30,        September 30,
                                                                 -----------------  ---------------------
                                                                   2002     2001       2002       2001
                                                                 --------  -------  ----------  ---------
<S>                                                              <C>       <C>      <C>         <C>

Operating Revenues                                               $ 695.2   $770.2   $ 2,009.3   $2,072.5
---------------------------------------------------------------------------------------------------------
Costs and Expenses
   Operating and maintenance                                       381.1    418.2     1,127.7    1,163.5
   Depreciation                                                    124.2    125.4       374.1      348.3
   Goodwill amortization                                             -       41.7         -        113.4
   General and administrative                                       15.8     14.5        51.6       43.9
---------------------------------------------------------------------------------------------------------
                                                                   521.1    599.8     1,553.4    1,669.1
---------------------------------------------------------------------------------------------------------
Impairment Loss on Long-Lived Assets                               (40.9)       -       (42.0)         -
Gain from Sale of Assets, net                                        2.9      9.4         3.5       29.0
---------------------------------------------------------------------------------------------------------
Operating Income                                                   136.1    179.8       417.4      432.4
---------------------------------------------------------------------------------------------------------
Other Income (Expense), net
   Equity in earnings of joint ventures                              0.4      6.3         4.8       12.0
   Interest income                                                   6.1      5.5        16.0       13.7
   Interest expense, net of amounts capitalized                    (52.3)   (60.8)     (160.7)    (164.8)
   Other, net                                                        1.3     (0.5)        0.2       (2.0)
---------------------------------------------------------------------------------------------------------
                                                                   (44.5)   (49.5)     (139.7)    (141.1)
---------------------------------------------------------------------------------------------------------
Income Before Income Taxes, Minority Interest, Extraordinary
   Item and Cumulative Effect of a Change in Accounting
   Principle                                                        91.6    130.3       277.7      291.3

Income Tax Expense (Benefit)                                      (164.8)    32.6      (137.1)      74.9
Minority Interest                                                    1.2      0.1         2.3        2.5
---------------------------------------------------------------------------------------------------------
Income Before Extraordinary Item and Cumulative Effect of a
   Change in Accounting Principle                                  255.2     97.6       412.5      213.9

Loss on Extraordinary Item, net of tax                                 -        -                  (17.3)
Cumulative Effect of a Change in Accounting Principle                  -        -    (1,363.7)         -
---------------------------------------------------------------------------------------------------------
Net Income (Loss)                                                $ 255.2   $ 97.6   $  (951.2)  $  196.6
=========================================================================================================


Basic Earnings (Loss) Per Share
   Income Before Extraordinary Item and Cumulative Effect of a
     Change in Accounting Principle                              $  0.80   $ 0.31   $    1.29   $   0.70
   Loss on Extraordinary Item, net of tax                              -        -                  (0.06)
   Cumulative Effect of a Change in Accounting Principle               -        -       (4.27)         -
---------------------------------------------------------------------------------------------------------
Net Income (Loss)                                                $  0.80   $ 0.31   $   (2.98)  $   0.64
=========================================================================================================


Diluted Earnings (Loss) Per Share
   Income Before Extraordinary Item and Cumulative Effect of a
       Change in Accounting Principle                            $  0.79   $ 0.30   $    1.28   $   0.69
   Loss on Extraordinary Item, net of tax                              -        -                  (0.06)
   Cumulative Effect of a Change in Accounting Principle               -        -       (4.22)         -
---------------------------------------------------------------------------------------------------------
Net Income (Loss)                                                $  0.79   $ 0.30   $   (2.94)  $   0.63
=========================================================================================================


Weighted Average Shares Outstanding
   Basic                                                           319.2    318.7       319.1      305.2
---------------------------------------------------------------------------------------------------------
   Diluted                                                         328.8    322.7       323.0      310.7
---------------------------------------------------------------------------------------------------------

Dividends Paid Per Share                                         $     -   $ 0.03   $    0.06   $   0.09
---------------------------------------------------------------------------------------------------------

                                      See accompanying notes.
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                 TRANSOCEAN  INC.  AND  SUBSIDIARIES
                     CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                           (In millions)
                                            (Unaudited)

                                                             Three Months Ended  Nine Months Ended
                                                                 September 30,     September 30,
                                                                ---------------  -----------------
                                                                 2002     2001     2002     2001
                                                                -------  ------  --------  -------
<S>                                                             <C>      <C>     <C>       <C>

Net income (loss)                                               $255.2   $97.6   $(951.2)  $196.6
--------------------------------------------------------------------------------------------------
Other comprehensive income (loss), net of tax
   Gain on terminated interest rate swaps                          -       -         -       4.1
   Amortization of gain on terminated interest rate swaps         (0.1)   (0.1)     (0.2)    (0.2)
   Change in unrealized loss on cash flow hedges                   -       0.5       -        -
   Change in unrealized loss on securities available for sale     (0.2)   (0.4)     (0.1)    (0.8)
   Change in share of unrealized loss in unconsolidated joint
      venture's interest rate swaps                               (0.2)    -         1.9      -
--------------------------------------------------------------------------------------------------
Other comprehensive income (loss)                                 (0.5)    -         1.6      3.1
--------------------------------------------------------------------------------------------------
Total comprehensive income (loss)                               $254.7   $97.6   $(949.6)  $199.7
==================================================================================================

                                        See accompanying notes.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                       TRANSOCEAN INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                       (In millions, except share data)

                                                                                September 30,    December 31,
                                                                                    2002             2001
                                                                               ---------------  --------------
                                                                                 (Unaudited)
<S>                                                                            <C>              <C>
                                     ASSETS

Cash and Cash Equivalents                                                      $      1,021.8   $       853.4
Accounts Receivable, net of allowance for doubtful accounts of
   $25.8 and $24.2 at September 30, 2002 and December 31, 2001, respectively            544.3           675.7
Materials and Supplies, net of allowance for obsolescence of $18.6 and
   $24.1 at September 30, 2002 and December 31, 2001, respectively                      164.0           158.8
Deferred Income Taxes                                                                    21.3            21.0
Other Current Assets                                                                     32.5            27.9
--------------------------------------------------------------------------------------------------------------
   Total Current Assets                                                               1,783.9         1,736.8
--------------------------------------------------------------------------------------------------------------

Property and Equipment                                                               10,150.2        10,081.4
Less Accumulated Depreciation                                                         2,053.0         1,713.3
--------------------------------------------------------------------------------------------------------------
   Property and Equipment, net                                                        8,097.2         8,368.1
--------------------------------------------------------------------------------------------------------------

Goodwill, net                                                                         5,099.1         6,466.7
Investments in and Advances to Joint Ventures                                           107.0           107.1
Other Assets                                                                            422.9           341.1
--------------------------------------------------------------------------------------------------------------
Total Assets                                                                   $     15,510.1   $    17,019.8
==============================================================================================================

                          LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts Payable                                                               $        128.1   $       188.4
Accrued Income Taxes                                                                     61.2           118.3
Debt Due Within One Year                                                                941.6           484.4
Other Current Liabilities                                                               280.9           283.4
--------------------------------------------------------------------------------------------------------------
   Total Current Liabilities                                                          1,411.8         1,074.5
--------------------------------------------------------------------------------------------------------------

Long-Term Debt                                                                        3,780.8         4,539.4
Deferred Income Taxes                                                                   128.1           317.1
Other Long-Term Liabilities                                                             236.9           178.5
--------------------------------------------------------------------------------------------------------------
   Total Long-Term Liabilities                                                        4,145.8         5,035.0
--------------------------------------------------------------------------------------------------------------

Commitments and Contingencies

Preference Shares, $0.10 par value; 50,000,000 shares authorized,
   none issued and outstanding                                                              -               -
Ordinary Shares, $0.01 par value; 800,000,000 shares authorized,
   319,219,486 and 318,816,035 shares issued and outstanding at
   September 30, 2002 and December 31, 2001, respectively                                 3.2             3.2
Additional Paid-in Capital                                                           10,622.7        10,611.7
Accumulated Other Comprehensive Income                                                   (0.7)           (2.3)
Retained Earnings (Deficit)                                                            (672.7)          297.7
--------------------------------------------------------------------------------------------------------------
   Total Shareholders' Equity                                                         9,952.5        10,910.3
--------------------------------------------------------------------------------------------------------------
   Total Liabilities and Shareholders' Equity                                  $     15,510.1   $    17,019.8
==============================================================================================================

                            See accompanying notes.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                       TRANSOCEAN INC. AND SUBSIDIARIES
                               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (In millions)
                                                 (Unaudited)

                                                                                  Nine Months Ended September 30,
                                                                                  -------------------------------
                                                                                          2002        2001
                                                                                        ---------  ----------
<S>                                                                                     <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                                                    $ (951.2)  $   196.6
   Adjustments to reconcile net income (loss) to
      net cash provided by operating activities
         Depreciation                                                                      374.1       348.3
         Goodwill amortization                                                               -         113.4
         Cumulative effect of a change in accounting principle - goodwill impairment     1,363.7         -
         Deferred income taxes                                                            (189.8)      (62.0)
         Equity in earnings of joint ventures                                               (4.8)      (12.0)
         Net (gain)/loss from disposal of assets                                             1.2       (25.9)
         Impairment loss on long-lived assets                                               42.0         -
         Loss on sale of securities                                                          -           2.0
         Amortization of debt-related discounts/premiums, fair value
            adjustments and issue costs, net                                                 4.6        (4.2)
         Deferred income, net                                                               (9.3)      (42.8)
         Deferred expenses, net                                                             (7.7)      (38.1)
         Extraordinary loss on debt extinguishment, net of tax                               -          17.3
         Other, net                                                                         11.9       (10.3)
         Changes in operating assets and liabilities, net of effects from the
            R&B Falcon merger
               Accounts receivable                                                         132.0      (103.5)
               Accounts payable and other current liabilities                              (41.9)      (78.7)
               Income taxes receivable/payable, net                                        (15.9)       75.4
               Other current assets                                                         (8.7)       (9.2)
-------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                                                  700.2       366.3
-------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                                                   (114.6)     (443.1)
   Proceeds from disposal of assets, net                                                    73.6       108.4
   Proceeds from sale of securities                                                          -          17.2
   Merger costs paid                                                                         -         (24.4)
   Cash acquired in merger, net of cash paid                                                 -         264.7
   Joint ventures and other investments, net                                                 4.6        13.0
-------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                                                      (36.4)      (64.2)
-------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net repayments on revolving credit agreements                                             -        (180.1)
   Net repayments under commercial paper program                                          (326.4)        -
   Repayments on other debt instruments                                                   (154.3)   (1,500.1)
   Net proceeds from issuance of debt                                                        -       1,693.5
   Net proceeds from issuance of ordinary shares under stock-based compensation plans       10.2        29.5
   Proceeds from issuance of ordinary shares upon exercise of warrants                       -          10.6
   Dividends paid                                                                          (19.1)      (28.6)
   Financing costs                                                                          (8.1)      (15.7)
   Other, net                                                                                2.3         5.3
-------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing Activities                                       (495.4)       14.4
-------------------------------------------------------------------------------------------------------------

Net Increase in Cash and Cash Equivalents                                                  168.4       316.5
-------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at Beginning of Period                                           853.4        34.5
-------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                              $1,021.8   $   351.0
=============================================================================================================

                                           See accompanying notes.
</TABLE>


                                        5
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - PRINCIPLES  OF  CONSOLIDATION

     Transocean  Inc. (formerly known as "Transocean Sedco Forex Inc.", together
with  its  subsidiaries and predecessors, unless the context requires otherwise,
the "Company") is a leading international provider of offshore and inland marine
contract  drilling services for oil and gas wells. As of September 30, 2002, the
Company  owned,  had  partial  ownership  interests  in or managed more than 150
mobile  offshore  and  barge  drilling units. The Company contracts its drilling
rigs, related equipment and work crews primarily on a dayrate basis to drill oil
and  gas  wells.

     On  January  31, 2001, the Company completed a merger transaction (the "R&B
Falcon  merger")  with R&B Falcon Corporation ("R&B Falcon"). As a result of the
merger,  R&B  Falcon  became an indirect wholly owned subsidiary of the Company.
The  merger  was  accounted for as a purchase with the Company as the accounting
acquiror.  The  condensed  consolidated  statements of operations, comprehensive
income and cash flows for the nine months ended September 30, 2001 include eight
months  of  operating  results  and  cash  flows  for  R&B  Falcon.

     Intercompany  transactions  and  accounts  have been eliminated. The equity
method  of accounting is used for investments in joint ventures owned 50 percent
or  less  and for investments in joint ventures owned more than 50 percent where
the  Company does not have significant control over the day-to-day operations of
the  joint  venture.

NOTE 2 - GENERAL

     BASIS OF CONSOLIDATION -  The accompanying condensed consolidated financial
statements  of  the  Company have been prepared without audit in accordance with
accounting  principles  generally  accepted  in  the  United States ("U.S.") for
interim financial information and with the instructions to Form 10-Q and Article
10  of  Regulation  S-X  of the Securities and Exchange Commission. Accordingly,
pursuant  to  such  rules  and  regulations,  these  financial statements do not
include  all disclosures required by accounting principles generally accepted in
the  U.S. for complete financial statements. Operating results for the three and
nine  months  ended  September  30,  2002  are not necessarily indicative of the
results  that  may  be expected for the year ending December 31, 2002 or for any
future  period. The accompanying condensed consolidated financial statements and
notes  thereto  should  be  read  in  conjunction  with the audited consolidated
financial  statements  and notes thereto included in the Company's Annual Report
on  Form  10-K  for  the  year  ended  December  31,  2001.

     ACCOUNTING  ESTIMATES  -  The  preparation  of  financial  statements  in
conformity  with  accounting  principles generally accepted in the U.S. requires
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities, revenues, expenses and disclosure of contingent assets and
liabilities. On an ongoing basis, the Company evaluates its estimates, including
those  related  to  bad debts, materials and supplies obsolescence, investments,
intangible  assets  and  goodwill,  property  and equipment and other long-lived
assets,  income  taxes,  financing  operations, workers' insurance, pensions and
other  post-retirement  and  employment benefits and contingent liabilities. The
Company  bases  its  estimates  on  historical  experience  and on various other
assumptions  that  are  believed  to  be reasonable under the circumstances, the
results  of  which form the basis for making judgments about the carrying values
of  assets  and  liabilities  that  are not readily apparent from other sources.
Actual  results  could  differ  from  such  estimates.

     SUPPLEMENTARY CASH FLOW INFORMATION - Cash payments for interest and income
taxes,  net,  were  $116.3 million and $74.0 million, respectively, for the nine
months  ended  September  30,  2002  and  $168.7  million  and  $49.9  million,
respectively,  for  the  nine  months  ended  September  30,  2001.


                                        6
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     GOODWILL  -  Prior  to  the  implementation  of  the  Financial  Accounting
Standards  Board's ("FASB") Statement of Financial Accounting Standards ("SFAS")
142,  Goodwill  and  Other  Intangible  Assets  (see  "-New  Accounting
Pronouncements"), the excess of the purchase price over the estimated fair value
of  net  assets  acquired  was  accounted for as goodwill and was amortized on a
straight-line  basis  based on a 40-year life. The amortization period was based
on  the  nature of the offshore drilling industry, long-lived drilling equipment
and  the  long-standing  relationships  with  core  customers.

     During the first quarter of 2002, the Company performed the initial test of
impairment  of  goodwill  on  its  two  reporting units, "International and U.S.
Floater  Contract  Drilling  Services"  and  "Gulf  of Mexico Shallow and Inland
Water."  The test was applied utilizing the fair value of the reporting units as
of  January  1, 2002 and was determined based on a combination of each reporting
unit's  discounted  cash  flows  and  publicly  traded  company  multiples  and
acquisition multiples of comparable businesses. There was no goodwill impairment
for  the  International  and  U.S.  Floater Contract Drilling Services reporting
unit. However, because of deterioration in the Gulf of Mexico Shallow and Inland
Water business segment since the completion of the R&B Falcon merger, a $1,363.7
million  ($4.22  per  diluted  share) impairment of goodwill was recognized as a
cumulative  effect  of a change in accounting principle in the nine months ended
September  30,  2002. The Company's goodwill balance, after giving effect to the
goodwill write down, is $5.1 billion as of September 30, 2002 (see Note 13). The
changes  in  the  carrying  amount  of  goodwill  are  as follows (in millions):

<TABLE>
<CAPTION>
                                                           Balance at                            Balance at
                                                           January 1,     Loss on              September 30,
                                                              2002       Impairment    Other        2002
                                                           -----------  ------------  -------  --------------
<S>                                                        <C>          <C>           <C>      <C>
International and U.S. Floater Contract Drilling Services  $   4,721.1  $       -     $ (3.9)  $      4,717.2
Gulf of Mexico Shallow and Inland Water                        1,745.6     (1,363.7)     -              381.9
                                                           -----------  ------------  -------  --------------
                                                           $   6,466.7  $  (1,363.7)  $ (3.9)  $      5,099.1
                                                           ===========  ============  =======  ==============
</TABLE>


                                        7
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     Net  income  (loss)  and  earnings  (loss) per share for the three and nine
months  ended September 30, 2002 and 2001 adjusted for goodwill amortization are
as  follows  (in  millions):

<TABLE>
<CAPTION>
                                                                 Three Months Ended     Nine Months Ended
                                                                   September 30,          September 30,
                                                               --------------------  ----------------------
                                                                 2002       2001        2002        2001
                                                               ---------  ---------  ----------  ----------
<S>                                                            <C>        <C>        <C>         <C>
Reported net income before extraordinary item and
   cumulative effect of a change in accounting principle       $   255.2  $    97.6  $   412.5   $   213.9
Add back: Goodwill amortization                                     -          41.7       -          113.4
                                                               ---------  ---------  ----------  ----------
Adjusted reported net income before extraordinary item
   and cumulative effect of a change in accounting principle       255.2      139.3      412.5       327.3
Loss on extraordinary item, net of tax                               -          -          -         (17.3)
Cumulative effect of a change in accounting principle                -          -     (1,363.7)        -
                                                               ---------  ---------  ----------  ----------
Adjusted net income (loss)                                     $   255.2  $   139.3  $  (951.2)  $   310.0
                                                               =========  =========  ==========  ==========

Basic earnings (loss) per share:
Reported net income before extraordinary item and
   cumulative effect of a change in accounting principle       $    0.80  $    0.31  $    1.29   $    0.70
Goodwill amortization                                               -          0.13       -           0.37
                                                               ---------  ---------  ----------  ----------
Adjusted reported net income before extraordinary item
   and cumulative effect of a change in accounting principle        0.80       0.44       1.29        1.07
Loss on extraordinary item, net of tax                               -          -          -         (0.06)
Cumulative effect of a change in accounting principle                -          -        (4.27)        -
                                                               ---------  ---------  ----------  ----------
Adjusted net income (loss)                                     $    0.80  $    0.44  $   (2.98)  $    1.01
                                                               =========  =========  ==========  ==========

Diluted earnings (loss) per share:
Reported net income before extraordinary item and
   cumulative effect of a change in accounting principle       $    0.79  $    0.30  $    1.28   $    0.69
Goodwill amortization                                                -         0.13        -          0.37
                                                               ---------  ---------  ----------  ----------
Adjusted reported net income before extraordinary item
   and cumulative effect of a change in accounting principle        0.79       0.43       1.28        1.06
Loss on extraordinary item, net of tax                               -          -          -         (0.06)
Cumulative effect of a change in accounting principle                -          -        (4.22)        -
                                                               ---------  ---------  ----------  ----------
Adjusted net income (loss)                                     $    0.79  $    0.43  $   (2.94)  $    1.00
                                                               =========  =========  ==========  ==========
</TABLE>

     IMPAIRMENT  OF LONG-LIVED ASSETS - The carrying value of long-lived assets,
principally  property  and  equipment, is reviewed for potential impairment when
events  or  changes  in  circumstances indicate that the carrying amount of such
assets  or  group  of  assets may not be recoverable. For property and equipment
held  for  use,  the  determination  of  recoverability  is  made based upon the
estimated  undiscounted  future  net cash flows of the related asset or group of
assets.  Property  and  equipment held for sale are recorded at the lower of net
book  value  or  net  realizable  value.  See "-New Accounting Pronouncements."

     CAPITALIZED  INTEREST - Interest  costs for the construction and upgrade of
qualifying  assets  are capitalized. The Company recorded $4.4 million and $34.9
million  in  capitalized interest costs on construction work in progress for the
three  and  nine months ended September 30, 2001, respectively. No interest cost
was  capitalized  during  the  three  and nine months ended September 30, 2002.


                                        8
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     CHANGE  IN  ESTIMATE  -  As  a result of the R&B Falcon merger, the Company
conformed  its  policies  relating  to  estimated  rig lives and salvage values.
Estimated  useful  lives  of  drilling  units  now  range  from  18 to 35 years,
reflecting  maintenance  history  and  market  demand  for these drilling units,
buildings  and improvements from 10 to 30 years and machinery and equipment from
four  to  12  years.  Depreciation  expense  for the three and nine months ended
September  30,  2001  was  reduced  by  approximately  $6 million (net $0.02 per
diluted share) and $17 million (net $0.05 per diluted share), respectively, as a
result  of  conforming  these  policies.

     INCOME  TAXES - Income taxes have been provided based upon the tax laws and
rates  in  the countries in which operations are conducted and income is earned.
The  income  tax  rates  imposed by these taxing authorities vary substantially.
Taxable income may differ from pre-tax income for financial accounting purposes.
There  is  no  expected  relationship between the provision for income taxes and
income  before  income  taxes  because  the  countries  have  different taxation
regimes,  which vary not only with respect to nominal rate, but also in terms of
the  availability  of  deductions,  credits  and other benefits. Variations also
arise because income earned and taxed in any particular country or countries may
fluctuate  from  period  to  period.

     COMPREHENSIVE  INCOME  -  The components of accumulated other comprehensive
income  as  of  September  30,  2002  and  December  31, 2001 are as follows (in
millions):

<TABLE>
<CAPTION>
                                                                                 September 30,    December 31,
                                                                                     2002             2001
                                                                                ---------------  --------------
<S>                                                                             <C>              <C>
Gain on terminated interest rate swaps                                          $          3.7   $         3.9
Unrealized loss on securities available for sale                                          (0.7)           (0.6)
Share of unrealized loss in unconsolidated joint venture's interest rate swaps            (3.7)           (5.6)
                                                                                ---------------  --------------
     Accumulated other comprehensive income                                     $         (0.7)  $        (2.3)
                                                                                ===============  ==============
</TABLE>

     SEGMENTS  -  The  Company's  operations  are aggregated into two reportable
segments: (i) International and U.S. Floater Contract Drilling Services and (ii)
Gulf  of  Mexico  Shallow  and  Inland Water. The Company provides services with
different  types  of  drilling  equipment  in  several  geographic  regions. The
location  of  the  Company's operating assets and the allocation of resources to
build  or  upgrade  drilling  units is determined by the activities and needs of
customers.  See  Note  8.

     INTERIM  FINANCIAL  INFORMATION  -  The  condensed  consolidated  financial
statements  reflect  all  adjustments,  which are, in the opinion of management,
necessary for a fair statement of results of operations for the interim periods.
Such  adjustments  are  considered  to  be  of  a normal recurring nature unless
otherwise  identified.

     NEW  ACCOUNTING  PRONOUNCEMENTS  -  In July 2001, the FASB issued SFAS 142,
Goodwill  and  Other  Intangible  Assets,  which  is  effective for fiscal years
beginning  after  December  15,  2001.  Under  SFAS 142, goodwill and intangible
assets  with  indefinite lives are no longer amortized but are reviewed at least
annually  for  impairment.  The  amortization  provisions  of  SFAS 142 apply to
goodwill  and  intangible  assets  acquired after June 30, 2001. With respect to
goodwill  and  intangible  assets  acquired  prior  to July 1, 2001, the Company
adopted SFAS 142 effective January 1, 2002 and will perform a test of impairment
as  of  October 1 each year. In conjunction with the adoption of this statement,
the  Company  has  discontinued the amortization of goodwill. Application of the
non-amortization provisions of SFAS 142 for goodwill is expected to result in an
increase  in  operating  income of approximately $155 million ($0.48 per diluted
share)  in  2002.  See  "-Goodwill."

     In  August  2001,  the  FASB  issued SFAS 144, Accounting for Impairment or
Disposal  of  Long-Lived  Assets.  SFAS  144 supersedes SFAS 121, Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, and
the  accounting  and reporting provisions of Accounting Principles Board Opinion


                                        9
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

("APB")  30,  Reporting  the  Results  of  Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring  Events  and Transactions. SFAS 144 retains the fundamental provisions
of  SFAS  121 for recognition and measurement of long-lived asset impairment and
for the measurement of long-lived assets to be disposed of by sale and the basic
requirements  of  APB  30. In addition to these fundamental provisions, SFAS 144
provides guidance for determining whether long-lived assets should be tested for
impairment  and  specific  criteria  for classifying assets to be disposed of as
held  for  sale.  The  statement  is  effective for fiscal years beginning after
December  15, 2001. The Company adopted the statement as of January 1, 2002. The
adoption  of this statement had no material effect on the Company's consolidated
financial  position  or  results  of  operations.  See  Note  9.

     In  April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No.
4,  44,  and  64, Amendment of FASB Statement No. 13, and Technical Corrections.
This statement eliminates the requirement under SFAS 4 to aggregate and classify
all  gains  and losses from extinguishment of debt as an extraordinary item, net
of  related  income  tax  effect.  This statement also amends SFAS 13 to require
certain  lease  modifications  with  economic  effects similar to sale-leaseback
transactions be accounted for in the same manner as sale-leaseback transactions.
In addition, SFAS 145 requires reclassification of gains and losses in all prior
periods  presented  in  comparative  financial  statements  related  to  debt
extinguishment  that  do not meet the criteria for extraordinary item in APB 30.
The  statement  is  effective for fiscal years beginning after May 15, 2002 with
early  adoption encouraged. The Company will adopt SFAS 145 effective January 1,
2003.  Management  does not expect adoption of this statement to have a material
effect  on  the  Company's  consolidated  financial  position  or  results  of
operations.

     In  July  2002,  the  FASB  issued  SFAS  146,  Obligations Associated with
Disposal  Activities, which is effective for disposal activities initiated after
December  15,  2002,  with  early  application  encouraged.  SFAS  146 addresses
financial  accounting  and  reporting for costs associated with exit or disposal
activities  and  nullifies  Emerging Issues Task Force Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including  Certain  Costs  Incurred  in a Restructuring).  Under this
statement,  a  liability for a cost associated with an exit or disposal activity
would  be  recognized  and measured at its fair value when it is incurred rather
than  at  the  date of commitment to an exit plan.  Also, severance pay would be
recognized  over  time  rather  than  up  front provided the benefit arrangement
requires  employees  to render future service beyond a minimum retention period,
which  would  be  based on the legal notification period, or if there is no such
requirement,  60  days,  thereby  allowing  a  liability to be recorded over the
employees'  future  service  period.  The  Company will adopt SFAS 146 effective
with  disposal activities initiated after December 15, 2002. Management does not
expect  adoption  of  this  statement to have a material effect on the Company's
consolidated  financial  position  or  results  of  operations.

     RECLASSIFICATIONS  -  Certain  reclassifications  have  been  made to prior
period  amounts  to  conform  with  the  current  period's  presentation.

NOTE  3  -  BUSINESS  COMBINATION

     On  January  31,  2001, the Company completed a merger transaction with R&B
Falcon,  in which an indirect wholly owned subsidiary of the Company merged with
and  into  R&B Falcon. As a result of the merger, R&B Falcon common shareholders
received  0.5  newly  issued  ordinary shares of the Company for each R&B Falcon
share.  The Company issued approximately 106 million ordinary shares in exchange
for  the  issued  and  outstanding shares of R&B Falcon and assumed warrants and
options  exercisable  for approximately 13 million ordinary shares. The ordinary
shares  issued  in  exchange for the issued and outstanding shares of R&B Falcon
constituted  approximately  33  percent  of  the  Company's outstanding ordinary
shares  after  the  merger.

     The  Company  accounted  for  the  merger  using  the  purchase  method  of
accounting  with  the  Company  treated as the accounting acquiror. The purchase
price  of  $6.7  billion is comprised of the calculated market capitalization of
the  Company's  ordinary  shares issued at the time of merger with R&B Falcon of
$6.1  billion  and  the  estimated  fair  value  of R&B Falcon stock options and
warrants at the time of the merger of $0.6 billion. The market capitalization of


                                       10
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

the  Company's  ordinary  shares issued was calculated using the average closing
price of the Company's ordinary shares for a period immediately before and after
August  21,  2000,  the  date  the  merger  was  announced.

     The  purchase  price included, at estimated fair value at January 31, 2001,
current  assets  of  $672  million, drilling and other property and equipment of
$4,010  million,  other  assets  of  $160  million and the assumption of current
liabilities of $338 million, other net long-term liabilities of $242 million and
long-term  debt  of  $3,206  million.  The excess of the purchase price over the
estimated  fair  value  of  net  assets  acquired  was $5,630 million, which was
accounted  for as goodwill and is reviewed for impairment annually in accordance
with  SFAS  142.  See  Note  2.

     In  conjunction  with  the  R&B  Falcon  merger,  the Company established a
liability  of $16.5 million for the estimated severance-related costs associated
with  the  involuntary  termination  of  569  R&B  Falcon  employees pursuant to
management's  plan  to  consolidate  operations  and  administrative  functions
post-merger.  Included  in  the  569  planned  involuntary terminations were 387
employees  engaged  in  the  Company's  land drilling business in Venezuela. The
Company has suspended active marketing efforts to divest this business and, as a
result, the estimated liability was reduced by $4.3 million in the third quarter
of  2001  with  an  offset  to goodwill. Through September 30, 2002 all required
severance-related  costs  were  paid  to  182  employees  whose  positions  were
eliminated  as  a  result  of  this  plan.

     Unaudited  pro  forma  combined  operating  results  of the Company and R&B
Falcon assuming the merger was completed as of January 1, 2001 are summarized as
follows  (in  millions,  except  per  share  data):

<TABLE>
<CAPTION>
                                        Nine Months Ended
                                       September 30, 2001
                                       -------------------
<S>                                    <C>
Operating revenues                     $           2,198.4
Operating income                                     436.6
Net income from continuing operations                202.7
Basic earnings per share               $              0.64
Diluted earnings per share                            0.63
</TABLE>

     The  pro forma information includes adjustments for additional depreciation
based  on the fair market value of the drilling and other property and equipment
acquired,  amortization  of  goodwill  arising  from  the transaction, increased
interest  expense  for  debt  assumed  in the merger and related adjustments for
income  taxes.  The  pro  forma information is not necessarily indicative of the
results  of  operations had the transaction been effected on the assumed date or
the  results  of  operations  for  any  future  periods.


                                       11
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

NOTE  4  -  DEBT

     Debt, net of unamortized discounts, premiums and fair value adjustments, is
comprised  of  the  following  (in  millions):

<TABLE>
<CAPTION>
                                                                            September 30,   December 31,
                                                                                 2002           2001
                                                                            --------------  -------------
<S>                                                                         <C>             <C>
Commercial Paper                                                            $          -    $       326.4
6.5% Senior Notes, due April 2003.                                                   239.9          240.5
9.125% Senior Notes, due December 2003                                                90.1           92.0
Term Loan Agreement - final maturity December 2004                                   325.0          400.0
6.75% Senior Notes, due April 2005 (a)                                               372.9          354.6
7.31% Nautilus Class A1 Amortizing Notes - final maturity May 2005                   114.5          142.9
9.41% Nautilus Class A2 Notes, due May 2005.                                          52.0           52.4
Secured Rig Financing                                                                  -             50.6
6.95% Senior Notes, due April 2008 (a)                                               278.4          252.3
9.5% Senior Notes, due December 2008 (a)                                             375.0          348.1
6.625% Notes, due April 2011 (a)                                                     810.9          711.7
7.375% Senior Notes, due April 2018.                                                 250.5          250.5
Zero Coupon Convertible Debentures, due May 2020 (put options exercisable
   May 2003, May 2008 and May 2013).                                                 523.4          512.2
1.5% Convertible Debentures, due May 2021 (put options exercisable May
   2006, May 2011 and May 2016).                                                     400.0          400.0
8% Debentures, due April 2027.                                                       198.0          197.9
7.45% Notes, due April 2027 (put options exercisable April 2007)                      94.5           94.4
7.5% Notes, due April 2031                                                           597.3          597.3
                                                                            --------------  -------------
   Total Debt.                                                              $      4,722.4  $     5,023.8
   Less Debt Due Within One Year (b)                                                 941.6          484.4
                                                                            --------------  -------------
   Total Long-Term Debt.                                                    $      3,780.8  $     4,539.4
                                                                            ==============  =============

<FN>
(a)  The Company has entered into interest rate swap agreements with respect to
     these debt instruments. See Note 7.
(b)  The Zero Coupon Convertible Debentures are classified as debt due within
     one year since the put option can be exercised in May 2003.
</TABLE>


                                       12
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     The  scheduled maturity of the face value of the Company's debt assumes the
put  options  on  the  Zero  Coupon  Convertible  Debentures,  1.5%  Convertible
Debentures  and  7.45%  Notes  will be exercised in May 2003, May 2006 and April
2007,  respectively,  and  is  as  follows  (in  millions):

                                                      Twelve
                                                      Months
                                                      Ending
                                                  September 30,
                                                  --------------
                       2003                       $        961.5
                       2004                                280.9
                       2005                                468.6
                       2006                                400.0
                       2007                                100.0
                       Thereafter                        2,300.0
                                                  --------------
                            Total                 $      4,511.0
                                                  ==============

     Commercial  Paper  Program  -  The Company's Revolving Credit Agreements, a
$550.0  million five-year revolving credit agreement dated December 29, 2000 and
a  $250.0  million  364-day  revolving credit agreement dated December 27, 2001,
provide  liquidity  for  commercial  paper borrowings. At September 30, 2002, no
amounts  were  outstanding  under  the  Commercial  Paper  Program  or under the
Revolving  Credit  Agreements.

     Term  Loan  Agreement  -  The  Company  is party to an amortizing unsecured
five-year term loan agreement dated as of December 16, 1999. Amounts outstanding
under  the Term Loan Agreement bear interest, at the Company's option, at a base
rate  or London Interbank Offered Rate ("LIBOR") plus a margin (0.70 percent per
annum  at  September  30,  2002)  that  varies depending on the Company's senior
unsecured  public  debt  rating.  The debt began to amortize in March 2002, at a
rate  of $25.0 million per quarter in 2002. In 2003 and 2004, the debt amortizes
at a rate of $37.5 million per quarter. As of September 30, 2002, $325.0 million
was  outstanding  under  this  agreement.

     Exchange  Offer  - In March 2002, the Company completed exchange offers and
consent  solicitations  for  R&B Falcon's 6.5%, 6.75%, 6.95%, 7.375%, 9.125% and
9.5%  notes.  As  a  result  of these exchange offers and consent solicitations,
approximately  $234.5  million,  $342.3 million, $247.8 million, $246.5 million,
$76.9  million,  and $289.8 million principal amount of R&B Falcon's outstanding
6.5%,  6.75%, 6.95%, 7.375%, 9.125% and 9.5% notes, respectively, were exchanged
for the Company's newly issued 6.5%, 6.75%, 6.95%, 7.375%, 9.125% and 9.5% notes
having  the  same  principal amount, interest rate, redemption terms and payment
and  maturity dates (and accruing interest from the last date for which interest
had  been  paid  on  the R&B Falcon notes). Because the holders of a majority in
principal  amount  of  each  of  these series of notes consented to the proposed
amendments  to the applicable indenture pursuant to which the notes were issued,
some  covenants,  restrictions  and  events  of default were eliminated from the
indentures  with  respect  to  these  series  of  notes.  After  the  exchange,
approximately  $5.0  million,  $7.7  million,  $2.2 million, $3.5 million, $10.2
million  and  $10.2  million  principal  amount  of the outstanding 6.5%, 6.75%,
6.95%,  7.375%,  9.125%  and  9.5% notes, respectively, not exchanged remain the
obligation  of  R&B  Falcon.  These  notes  are  combined  with the notes of the
corresponding  series  issued  by  the Company in the above table. In connection
with  the  exchange offers, an aggregate of $8.3 million in consent payments was
made  by  R&B  Falcon to holders of R&B Falcon notes whose notes were exchanged.
The  consent  payments will be amortized as an increase to interest expense over
the  remaining  term  of the respective notes using the interest method and such
amortization  is  expected  to  be  $1.3  million  in  2002.

     Secured  Rig  Financing  -  In January 2002, the Company exercised its call
option  under the financing arrangement to repay the financing on the Trident 16
prior  to  the  expiration of the scheduled term. The aggregate principal amount


                                       13
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

outstanding  was  $32.2 million. The premium paid as a result of the call option
of approximately $2 million was recorded as an increase in the net book value of
the  Trident  16.

     In  March  2002,  the Company exercised its call option under the financing
arrangement  to repay the financing on the Trident IX prior to the expiration of
the  scheduled  term.  The  aggregate  principal  amount  outstanding  was $14.9
million.  The  premium paid as a result of the call option of approximately $0.5
million  was  recorded  as  an increase in the net book value of the Trident IX.

     Redeemed  and  Repurchased  Debt  - On April 10, 2001, pursuant to a tender
offer,  R&B  Falcon  acquired  all of the approximately $400.0 million principal
amount  outstanding  11.375% Senior Secured Notes due 2009 of its affiliate, RBF
Finance  Co.,  at 122.51 percent, or $1,225.10 per $1,000 principal amount, plus
accrued and unpaid interest. On April 6, 2001, RBF Finance Co. also redeemed all
of  the  approximately  $400.0  million  principal amount outstanding 11% Senior
Secured  Notes  due  2006  at 125.282 percent, or $1,252.82 per $1,000 principal
amount,  plus  accrued  and  unpaid interest, and R&B Falcon redeemed all of the
approximately  $200.0  million  principal amount outstanding 12.25% Senior Notes
due  2006  at  130.675  percent  or  $1,306.75 per $1,000 principal amount, plus
accrued and unpaid interest. The Company funded the redemption from the issuance
of  the  6.625%  Notes  and  7.5% Notes in April 2001.  In the second quarter of
2001, the Company recognized an extraordinary loss, net of tax, of $18.9 million
($0.06  per  diluted  share)  on  the  early  extinguishment  of  this  debt.

     On  March  30,  2001,  pursuant  to  an  offer  made in connection with the
Company's  acquisition  of  R&B  Falcon,  Cliffs  Drilling  Company  ("Cliffs
Drilling"), a wholly owned subsidiary of R&B Falcon, acquired approximately $0.1
million of the 10.25% Senior Notes due 2003 at an amount equal to 101 percent of
the  principal  amount.  On  May  18,  2001, Cliffs Drilling redeemed all of the
approximately  $200.0  million  principal amount outstanding 10.25% Senior Notes
due  2003,  at  102.5  percent,  or  $1,025.00 per $1,000 principal amount, plus
interest  accrued to the redemption date. As a result, the Company recognized an
extraordinary gain, net of tax, of $1.6 million ($0.01 per diluted share) in the
second  quarter  of  2001  relating  to  the  early extinguishment of this debt.

NOTE 5 - OTHER  CURRENT  LIABILITIES

     Other current liabilities are comprised of the following (in millions):

<TABLE>
<CAPTION>
                                       September 30,   December 31,
                                            2002           2001
                                       --------------  -------------
<S>                                    <C>             <C>
Accrued Payroll and Employee Benefits  $        133.2  $       134.2
Accrued Interest                                 78.2           38.8
Contract Disputes and Legal Claims               20.0           47.5
Accrued Taxes, Other than Income                 23.5           26.6
Deferred Revenue                                 13.0           18.2
Other                                            13.0           18.1
                                       --------------  -------------
                                       $        280.9  $       283.4
                                       ==============  =============
</TABLE>

NOTE  6  -  INCOME  TAXES

     In September 2002, the Company recorded a $176.2 million ($0.55 per diluted
share) foreign tax benefit attributable to the restructuring of certain non-U.S.
operations.  As  a  result  of the restructuring, previously unrecognized losses
were  offset  against  deferred  gains,  resulting in a reduction of non-current
deferred  taxes  payable.


                                       14
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

NOTE  7  -  INTEREST  RATE  SWAPS

     In  February  2002,  the Company entered into interest rate swap agreements
with  a  group  of  banks  in  the  aggregate  notional amount of $900.0 million
relating  to  the  Company's  $350.0 million aggregate principal amount of 6.75%
Senior  Notes due April 2005, $250.0 million aggregate principal amount of 6.95%
Senior  Notes  due  April  2008 and $300.0 million aggregate principal amount of
9.5%  Senior  Notes  due  December 2008. The objective of each transaction is to
protect  the  debt against changes in fair value due to changes in the benchmark
interest  rate.  Under  each  interest rate swap, the Company receives the fixed
rate  equal  to the coupon of the hedged item and pays the floating rate (LIBOR)
plus  a  margin  of  246  basis  points,  171 basis points and 413 basis points,
respectively,  which  are designated as the respective benchmark interest rates,
on  each  of  the interest payment dates until maturity of the respective notes.
The  hedges are considered perfectly effective against changes in the fair value
of the debt due to changes in the benchmark interest rates over their term. As a
result,  the  shortcut  method  applies  and  there  is  no need to periodically
reassess  the  effectiveness  of  the  hedges  during  the  term  of  the swaps.

     At  September  30, 2002, the Company had outstanding interest rate swaps in
the aggregate notional amount of $1.6 billion. The market value of the Company's
outstanding  interest rate swaps was included in other assets with corresponding
increases  to  long-term  debt and debt due within one year, as appropriate, and
was  as  follows  (in  millions):

<TABLE>
<CAPTION>
                                      September 30,   December 31,
                                           2002           2001
                                      --------------  -------------
<S>                                   <C>             <C>
6.75% Senior Notes, due April 2005    $         19.4  $           -
6.95% Senior Notes, due April 2008              26.4              -
9.5% Senior Notes, due December 2008            32.0              -
6.625% Notes, due April 2011                   114.0           15.1
                                      --------------  -------------
                                      $        191.8  $        15.1
                                      ==============  =============
</TABLE>

     Deepwater  Drilling  L.L.C.,  an  unconsolidated  subsidiary  in  which the
Company  has  a  50  percent  ownership interest, has entered into interest rate
swaps  with  aggregate  market  values netting to a liability of $8.2 million at
September  30,  2002. The Company's interest in these swaps has been included in
accumulated  other  comprehensive  income  with  a  corresponding  reduction  to
investments  in  and  advances  to  joint  ventures.

NOTE  8  -  SEGMENTS

     The  Company's  operations are aggregated into two reportable segments: (i)
International  and  U.S.  Floater  Contract  Drilling  Services and (ii) Gulf of
Mexico  Shallow  and  Inland  Water. The International and U.S. Floater Contract
Drilling  Services  segment  consists  of  high-specification  floaters,  other
floaters,  non-U.S.  jackups,  other  mobile  offshore  drilling units and other
assets  used  in  support  of  offshore drilling activities and offshore support
services. The Gulf of Mexico Shallow and Inland Water segment consists of jackup
and  submersible  drilling  rigs and inland drilling barges located in the U. S.
Gulf  of  Mexico  and  Trinidad,  as  well as land and lake barge drilling units
located  in  Venezuela.  The  Company  provides services with different types of
drilling  equipment in several geographic regions. The location of the Company's
rigs  and  the allocation of resources to build or upgrade rigs is determined by
the  activities  and  needs  of  customers.

     Effective  January  1,  2002,  the  Company  changed the composition of its
reportable  segments  with  the  move  of  the  responsibility for its Venezuela
operations to the Gulf of Mexico Shallow and Inland Water segment. Prior periods
have  been  restated  to  reflect  the  change.


                                       15
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     Operating  revenues  and  income  before  income  taxes, minority interest,
extraordinary  item and cumulative effect of a change in accounting principle by
segment  are  as  follows  (in  millions):

<TABLE>
<CAPTION>
                                                                      Three Months Ended     Nine Months Ended
                                                                         September 30,          September 30,
                                                                    ----------------------  --------------------------
                                                                       2002        2001         2002          2001
                                                                    ----------  ----------  ------------  ------------
<S>                                                                 <C>         <C>         <C>           <C>
Operating Revenues
   International and U.S. Floater Contract Drilling Services        $   641.2   $   641.5   $   1,873.5   $   1,706.7
   Gulf of Mexico Shallow and Inland Water                               54.0       128.7         135.8         372.0
   Elimination of intersegment revenues                                   -           -             -            (6.2)
                                                                    ----------  ----------  ------------  ------------
       Total Operating Revenues                                     $   695.2   $   770.2   $   2,009.3   $   2,072.5
                                                                    ----------  ----------  ------------  ------------

Operating income before general and administrative expense
   International and U.S. Floater Contract Drilling Services        $   190.0   $   187.4   $     570.8   $     420.9
   Gulf of Mexico Shallow and Inland Water                              (38.1)        6.9        (101.8)         55.4
                                                                    ----------  ----------  ------------  ------------
                                                                        151.9       194.3         469.0         476.3
Unallocated general and administrative expense                          (15.8)      (14.5)        (51.6)        (43.9)
Unallocated other income (expense), net                                 (44.5)      (49.5)       (139.7)       (141.1)
                                                                    ----------  ----------  ------------  ------------
       Total Income before Income Taxes, Minority Interest,
           Extraordinary Item and Cumulative Effect of a Change in
            Accounting Principle                                    $    91.6   $   130.3   $     277.7   $     291.3
                                                                    ==========  ==========  ============  ============


Total assets by segment are as follows (in millions):
                                                                                           September 30,  December 31,
                                                                                               2002           2001
                                                                                            ------------  ------------
   International and U.S. Floater Contract Drilling Services                                $   14,252.1  $  14,219.3
   Gulf of Mexico Shallow and Inland Water                                                       1,258.0      2,800.5
                                                                                            ------------  ------------
       Total Assets                                                                         $   15,510.1  $  17,019.8
                                                                                            ============  ============
</TABLE>

NOTE  9  -  ASSET  DISPOSITIONS  AND  IMPAIRMENT  LOSS

     In  July  2002,  the  Company's  International  and  U.S.  Floater Contract
Drilling  Services  segment  sold  an  office  building for net proceeds of $3.0
million,  resulting  in  a  net  after-tax  loss  of  $0.3  million.

     In July 2002, the Company's Gulf of Mexico Shallow and Inland Water segment
sold a land rig for net proceeds of $2.1 million. No gain or loss was recognized
on  the  sale.

     In  June  2002,  the  Company's  International  and  U.S.  Floater Contract
Drilling  Services  segment sold a jackup rig, the RBF 209, and recognized a net
after-tax  loss  of  $1.5  million.

     In  March  2002,  the  Company's  International  and  U.S. Floater Contract
Drilling  Services  segment sold two semisubmersible rigs, the Transocean 96 and
Transocean  97,  for net proceeds of $30.7 million, resulting in a net after-tax
gain  of  $1.3  million.

     During  the  nine months ended September 30, 2002, the Company also settled
an  insurance  claim and sold certain other non-strategic assets acquired in the
R&B  Falcon  merger  and  certain other assets held for sale for net proceeds of
approximately  $20.4  million,  resulting in net after-tax gains of $2.3 million
($0.01  per  diluted  share) and $0.5 million in the Company's International and
U.S.  Floater  Contract  Drilling Services and Gulf of Mexico Shallow and Inland
Water  segments,  respectively.


                                       16
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     In  February  2001, Sea Wolf Drilling Limited ("Sea Wolf"), a joint venture
in which the Company holds a 25 percent interest, sold two semisubmersible rigs,
the  Drill  Star  and  Sedco Explorer, to Pride International, Inc. In the first
quarter of 2001, the Company recognized accelerated amortization of the deferred
gain  related  to the Sedco Explorer of $18.5 million ($0.06 per diluted share),
which  is included in gain from sale of assets. The Company continued to operate
the  Drill  Star,  which  has  been  renamed  the  Pride North Atlantic, under a
bareboat  charter  agreement  until  October  2001,  at  which  time the rig was
returned  to  its  owner. The amortization of the Drill Star's deferred gain was
accelerated  and  produced  incremental gains in the three and nine months ended
September  30, 2001 of $13.6 million ($0.04 per diluted share) and $36.3 million
($0.12  per  diluted  share),  respectively, which is included as a reduction of
operating  and  maintenance  expense.

     During  the  nine  months  ended  September 30, 2001, the Company also sold
certain non-strategic assets acquired in the R&B Falcon merger and certain other
assets  held  for  sale. The Company received net proceeds of approximately $108
million.  These sales resulted in net after-tax gains of $4.7 million ($0.02 per
diluted  share)  and  $2.8  million  ($0.01  per diluted share) in the Company's
International  and  U.S.  Floater  Contract Drilling Services and Gulf of Mexico
Shallow  and  Inland  Water  segments,  respectively,  for the nine months ended
September  30,  2001.

     In  September 2002, the Company recorded non-cash impairment charges in the
International  and  U.S.  Floater  Contract  Drilling  Services segment of $20.2
million  ($0.06  per diluted share) and in the Gulf of Mexico Shallow and Inland
Water segment of $15.2 million ($0.05 per diluted share) relating to assets held
for  sale  reclassified  as assets held and used. The impairment of these assets
resulted  from  management's assessment that these assets no longer met the held
for  sale  criteria  under  SFAS  144. In accordance with SFAS 144, the carrying
value of these assets was adjusted to the lower of fair market value or carrying
value adjusted for depreciation from the date the assets were classified as held
for  sale.  The  fair  market  values  were  based on third party valuations. In
addition,  an  impairment  of $5.5 million ($0.02 per diluted share), determined
based  on an offer from a potential buyer, was recorded in the International and
U.S.  Floater  Contract  Drilling Services segment relating to other assets held
for  sale.

     In  March  2002,  the  Company recorded a non-cash impairment charge in the
Gulf of Mexico Shallow and Inland Water segment of $1.1 million. The impairment,
relating  to  an  asset  held  for  sale, resulted from deterioration in current
market  conditions. The impairment was determined and measured based on an offer
from  a  potential  buyer.


                                       17
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

NOTE  10  -  EARNINGS  PER  SHARE

     The  reconciliation  of  the  numerator  and  denominator  used  for  the
computation  of basic and diluted earnings per share is as follows (in millions,
except  per  share  data):

<TABLE>
<CAPTION>
                                                                     Three Months Ended      Nine Months Ended
                                                                        September 30,           September 30,
                                                                   ----------------------  ------------------------
                                                                      2002        2001        2002         2001
                                                                   ----------  ----------  -----------  -----------
<S>                                                                <C>         <C>         <C>          <C>
NUMERATOR FOR BASIC EARNINGS (LOSS) PER SHARE
Income Before Extraordinary Item and Cumulative Effect of a
   Change in Accounting Principle                                  $    255.2  $     97.6  $    412.5   $    213.9
Loss on Extraordinary Item, net of tax                                    -           -           -          (17.3)
Cumulative Effect of a Change in Accounting Principle                     -           -      (1,363.7)         -
                                                                   ----------  ----------  -----------  -----------
Net Income (Loss)                                                  $    255.2  $     97.6  $   (951.2)  $    196.6
                                                                   ==========  ==========  ===========  ===========

NUMERATOR FOR DILUTED EARNINGS (LOSS) PER SHARE
Income Before Extraordinary Item and Cumulative Effect of a
   Change in Accounting Principle                                  $    255.2  $     97.6  $    412.5   $    213.9
Add back effect of dilutive zero coupon convertible debentures            3.8         -           -            -
                                                                   ----------  ----------  -----------  -----------
Income Before Extraordinary Item and Cumulative Effect of a
   Change in Accounting Principle for diluted earnings per share        259.0        97.6       412.5        213.9
Loss on Extraordinary Item, net of tax                                    -           -           -          (17.3)
Cumulative Effect of a Change in Accounting Principle                     -           -      (1,363.7)         -
                                                                   ----------  ----------  -----------  -----------
Net Income (Loss) for diluted earnings per share                   $    259.0  $     97.6  $   (951.2)  $    196.6
                                                                   ==========  ==========  ===========  ===========

DENOMINATOR FOR DILUTED EARNINGS (LOSS) PER SHARE
Weighted-average shares outstanding for basic earnings per share        319.2       318.7       319.1        305.2
Effect of dilutive securities:
   Employee stock options and unvested stock grants                       1.5         2.2         2.3          3.1
   Warrants to purchase ordinary shares                                   1.0         1.8         1.6          2.4
   Zero coupon convertible debentures                                     7.1         -           -            -
                                                                   ----------  ----------  -----------  -----------
Adjusted weighted-average shares and assumed conversions for
   diluted earnings per share                                           328.8       322.7       323.0        310.7
                                                                   ==========  ==========  ===========  ===========

BASIC EARNINGS (LOSS) PER SHARE
   Income Before Extraordinary Item and Cumulative Effect of a
       Change in Accounting Principle                              $     0.80  $     0.31  $     1.29   $     0.70
   Loss on Extraordinary Item, net of tax                                 -           -           -          (0.06)
   Cumulative Effect of a Change in Accounting Principle                  -           -         (4.27)         -
                                                                   ----------  ----------  -----------  -----------
   Net Income (Loss)                                               $     0.80  $     0.31  $    (2.98)  $     0.64
                                                                   ==========  ==========  ===========  ===========

DILUTED EARNINGS (LOSS) PER SHARE
   Income Before Extraordinary Item and Cumulative Effect of a
      Change in Accounting Principle                               $     0.79  $     0.30  $     1.28   $     0.69
   Loss on Extraordinary Item, net of tax                                 -           -           -          (0.06)
   Cumulative Effect of a Change in Accounting Principle                  -           -         (4.22)         -
                                                                   ----------  ----------  -----------  -----------
   Net Income (Loss)                                               $     0.79  $     0.30  $    (2.94)  $     0.63
                                                                   ==========  ==========  ===========  ===========
</TABLE>

     Ordinary  shares subject to issuance pursuant to the conversion features of
the  Company's  zero  coupon  convertible  debentures  are  not  included in the
calculation  of  adjusted  weighted-average  shares  and assumed conversions for
diluted  earnings  per  share  because  the  effect of including those shares is
anti-dilutive for the nine months ended September 30, 2002 and for the three and
nine  months  ended  September  30,  2001.


                                       18
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

NOTE  11  -  CONTINGENCIES

     Legal  Proceedings  -  In  November  1988,  a lawsuit was filed in the U.S.
District  Court  for  the  Southern  District of West Virginia against Reading &
Bates Coal Co., a wholly owned subsidiary of R&B Falcon, by SCW Associates, Inc.
claiming  breach  of  an  alleged  agreement to purchase the stock of Belva Coal
Company,  a  wholly  owned  subsidiary  of  Reading  &  Bates Coal Co. with coal
properties  in  West Virginia. When those coal properties were sold in July 1989
as part of the disposition of R&B Falcon's coal operations, the purchasing joint
venture  indemnified  Reading  &  Bates  Coal  Co.  and  R&B  Falcon against any
liability Reading & Bates Coal Co. might incur as a result of this litigation. A
judgment for the plaintiff of $32,000 entered in February 1991 was satisfied and
Reading  &  Bates  Coal  Co. was indemnified by the purchasing joint venture. On
October  31,  1990,  SCW Associates, Inc., the plaintiff in the above-referenced
action,  filed a separate ancillary action in the Circuit Court, Kanawha County,
West  Virginia  against  R&B  Falcon, Caymen Coal, Inc. (the former owner of R&B
Falcon's  West  Virginia  coal  properties),  as  well as the joint venture, Mr.
William  B.  Sturgill  (the  former  President  of  Reading  &  Bates  Coal Co.)
personally,  three  other  companies  in which the Company believes Mr. Sturgill
holds  an  equity  interest,  two employees of the joint venture, First National
Bank  of  Chicago  and  First Capital Corporation. The lawsuit sought to recover
compensatory  damages  of  $50  million  and punitive damages of $50 million for
alleged  tortious  interference with the contractual rights of the plaintiff and
to  impose  a  constructive  trust on the proceeds of the use and/or sale of the
assets of Caymen Coal, Inc. as they existed on October 15, 1988. The lawsuit was
settled  in  August 2002, and the terms of the settlement have been reflected in
the  Company's  results  of  operations  for the nine months ended September 30,
2002.  The  settlement did not have a material adverse effect on its business or
consolidated  financial  position.

     The Company also has certain other actions or claims pending that have been
previously  discussed  and  reported in the Company's Annual Report on Form 10-K
for  the year ended December 31, 2001 and Quarterly Reports on Form 10-Q for the
quarters  ended  March  31,  2002 and June 30, 2002. There have been no material
developments  in  these  previously  reported  matters.  The  Company  and  its
subsidiaries  are  involved  in  a  number  of other lawsuits, all of which have
arisen  in  the  ordinary course of the Company's business. The Company does not
believe  that  the  ultimate  liability,  if  any, resulting from any such other
pending  litigation  will  have  a  material  adverse  effect on its business or
consolidated  financial  position.

     The  Company  cannot predict with certainty the outcome or effect of any of
the litigation matters specifically described above or of any such other pending
litigation.  There  can  be  no  assurance  that  the  Company's  beliefs  or
expectations  as  to  the  outcome  or effect of any lawsuit or other litigation
matter  will  prove  correct  and  the  eventual  outcome of these matters could
materially  differ  from  the  Company's  current  estimates.

     Letters  of  Credit  and  Surety  Bonds - The Company had letters of credit
outstanding  at  September  30,  2002  totaling  $53.7 million. These letters of
credit  guarantee  various contract bidding and insurance activities. In January
2002, the Company terminated its $70.0 million letter of credit facility secured
by mortgages on five drilling units, the J.W. McLean, J.T. Angel, Randolph Yost,
D.R.  Stewart  and  George  H.  Galloway.

     As  is  customary  in  the contract drilling business, the Company also has
various  surety  bonds  totaling  $207.1  million  in  place that secure customs
obligations  relating  to the importation of rigs as well as certain performance
and  other  obligations.

NOTE  12  -  RESTRUCTURING  CHARGES

     In  September  2002,  the  Company committed to a restructuring plan in the
International  and  U.S. Floater Contract Drilling services segment to close its
engineering  office in Montrouge, France. The Company established a liability of
$2.8  million  for  the  estimated  severance-related  costs associated with the
involuntary  termination  of  16 employees pursuant to this plan. The charge was
reported  as  operating  and  maintenance  expense  in  the  Company's condensed
consolidated  statements  of operations.  Through September 30, 2002, no amounts


                                       19
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

had  been  paid to employees whose positions are being eliminated as a result of
this  plan.  The Company anticipates that substantially all amounts will be paid
by  the  end  of  the  first  quarter  of  2003.

     In  September  2002,  the  Company committed to a restructuring plan in the
International  and  U.S.  Floater Contract Drilling services segment for a staff
reduction  in  Norway  as  a result of a decline in activity in that region. The
Company  established  a  liability  of  $1.2  million  for  the  estimated
severance-related  costs  associated  with  the  involuntary  termination  of  8
employees  pursuant  to  this  plan.  The  charge  was reported as operating and
maintenance  expense  in  the  Company's  condensed  consolidated  statements of
operations.  Through  September  30, 2002, no amounts had been paid to employees
whose  positions  are  being  eliminated  as  a result of this plan. The Company
anticipates  that substantially all amounts will be paid by the end of the first
quarter  of  2004.

     In  September  2002,  the  Company committed to a restructuring plan in the
Gulf  of  Mexico  Shallow  and  Inland Water segment involving the closure of an
office  and  warehouse in Louisiana and relocation of most of the operations and
administrative  functions  previously  conducted  at  that location. The Company
established  a  liability  of  $1.2  million for the estimated severance-related
costs  associated  with  the involuntary termination of 57 employees pursuant to
this  plan.  The charge was reported as operating and maintenance expense in the
Company's condensed consolidated statements of operations. Through September 30,
2002, no amounts had been paid to employees whose employment is being terminated
as a result of this plan. The Company anticipates that substantially all amounts
will  be  paid  by  the  end  of  the  first  quarter  of  2003.

NOTE  13  -  SUBSEQUENT  EVENTS

     The  Company  is  continuing  to  pursue  its previously announced plans to
divest  its  Gulf  of Mexico Shallow and Inland Water business. Under this plan,
the Gulf of Mexico Shallow and Inland Water business would be separated from the
Company  and  established  as  a  publicly traded company. The Company currently
anticipates  that  it  will  establish  R&B  Falcon,  which  will  be renamed in
connection  with  the  transaction,  as  the entity that owns this business. The
Company  plans  to  transfer assets not used in this business from R&B Falcon to
the  Company's  other subsidiaries, and these internal transfers will not affect
the consolidated financial statements of Transocean. The Company expects to sell
a  portion  of  its  interest  in  R&B Falcon in an initial public offering. The
Company  anticipates  completing  the  initial  public  offering  when  market
conditions  warrant,  subject  to  various  factors.  Given  the current general
uncertainty  in  the  equity markets, the Company is unsure when the transaction
could  be  completed  on  terms  acceptable  to  it.

     The  Company is currently performing its annual test of goodwill impairment
as required by SFAS 142 as of October 1, 2002, the annual test date. As a result
of  the  decline  in  the  Company's stock price since January 1, 2002, when the
initial  test  under  SFAS  142  was  performed,  management expects to record a
non-cash  impairment  of  a  significant  majority of the Company's $5.1 billion
goodwill  balance  in  the  fourth  quarter of 2002 and that the impairment will
affect  both  reporting  units.


                                       20
<PAGE>
ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF  OPERATIONS

     The  following  information  should be read in conjunction with the audited
consolidated  financial  statements  and  the  notes  thereto  included  in  the
Company's  Annual  Report  on  Form  10-K  for the year ended December 31, 2001.

OVERVIEW

     Transocean  Inc. (formerly known as "Transocean Sedco Forex Inc.", together
with  its  subsidiaries and predecessors, unless the context requires otherwise,
the  "Company,"  "Transocean,"  "we,"  "us" or "our") is a leading international
provider  of  offshore  and inland marine contract drilling services for oil and
gas  wells. As of October 31, 2002, we owned, had partial ownership interests in
or  managed  more  than 150 mobile offshore and barge drilling units. As of this
date,  our  active  fleet  of  core  assets  consisted  of 31 high-specification
drillships and semisubmersibles ("floaters"), 29 other floaters, 54 jackup rigs,
35  drilling  barges,  four  tenders  and  three  submersible  drilling rigs. In
addition, the fleet included non-core assets consisting of two platform drilling
rigs  and  a mobile offshore production unit, as well as nine land drilling rigs
and  three  lake  barges  in  Venezuela.  We contract our drilling rigs, related
equipment  and  work  crews  primarily  on  a dayrate basis to drill oil and gas
wells.  We also provide additional services, including management of third-party
well  service  activities.

     On  January  31,  2001,  we  completed a merger transaction with R&B Falcon
Corporation  ("R&B  Falcon").  At  the time of the merger, R&B Falcon owned, had
partial ownership interests in, operated or had under construction more than 100
mobile  offshore  drilling  units  and  other  units  utilized in the support of
offshore  drilling  activities. As a result of the merger, R&B Falcon became our
indirect wholly owned subsidiary. The merger was accounted for as a purchase and
we  were  the  accounting  acquiror.  The  condensed  consolidated statements of
operations  and  cash flows for the nine months ended September 30, 2001 include
eight  months  of  operating  results  and  cash  flows  for  R&B  Falcon.

     On  May  9,  2002,  we changed our name from Transocean Sedco Forex Inc. to
Transocean  Inc.

     On  May 9, 2002, our Board of Directors voted to discontinue the payment of
a cash dividend after the cash dividend payable on June 13, 2002 to shareholders
of  record  on  May  30,  2002.

     Our  operations  are  aggregated  into  two  reportable  segments:  (i)
International  and  U.S.  Floater  Contract  Drilling  Services and (ii) Gulf of
Mexico  Shallow  and  Inland  Water. The International and U.S. Floater Contract
Drilling  Services  segment  consists  of  high-specification  floaters,  other
floaters,  non-U.S.  jackups,  other  mobile  offshore  drilling units and other
assets  used  in  support  of  offshore drilling activities and offshore support
services. The Gulf of Mexico Shallow and Inland Water segment consists of jackup
and  submersible  drilling  rigs and inland drilling barges located in the U. S.
Gulf  of  Mexico  and  Trinidad,  as well as land drilling units and lake barges
located  in  Venezuela.  We  provide  services  with different types of drilling
equipment  in  several  geographic  regions.  The  location  of our rigs and the
allocation of resources to build or upgrade rigs is determined by the activities
and  needs  of  our  customers.

     Effective  January  1,  2002,  we changed the composition of our reportable
segments with the move of the responsibility for our Venezuela operations to the
Gulf  of  Mexico  Shallow  and  Inland  Water  segment.  Prior periods have been
restated  to  reflect  the  change.

     In  July  2002,  we  announced plans to pursue a divestiture of our Gulf of
Mexico  Shallow  and  Inland Water business. Under this plan, our Gulf of Mexico
Shallow  and  Inland  Water  business  would  be  separated  from Transocean and
established  as  a publicly traded company. We currently anticipate that we will
establish  R&B Falcon, which will be renamed in connection with the transaction,
as  the  entity  that owns this business. We plan to transfer assets not used in
this  business  from  R&B  Falcon  to our other subsidiaries, and these internal
transfers  will  not affect the consolidated financial statements of Transocean.
We  expect  to sell a portion of our interest in R&B Falcon in an initial public
offering.  We  anticipate  completing  the  initial


                                       21
<PAGE>
public  offering  when  market  conditions  warrant, subject to various factors.
Given  the current general uncertainty in the equity markets, we are unsure when
the  transaction  could  be  completed  on  terms  acceptable  to  us.

CRITICAL  ACCOUNTING  POLICIES  AND  ESTIMATES

     Our  discussion  and  analysis  of  our  financial condition and results of
operations  are  based upon our condensed consolidated financial statements. The
preparation  of  these  financial  statements  requires us to make estimates and
judgments  that  affect  the  reported amounts of assets, liabilities, revenues,
expenses  and  related  disclosure  of  contingent assets and liabilities. On an
on-going basis, we evaluate our estimates, including those related to bad debts,
materials  and  supplies  obsolescence,  investments,  intangible  assets  and
goodwill,  property  and  equipment  and  other long-lived assets, income taxes,
financing operations, workers' insurance, pensions and other post-retirement and
employment  benefits  and  contingent  liabilities.  We  base  our  estimates on
historical  experience  and on various other assumptions that are believed to be
reasonable  under  the  circumstances,  the  results of which form the basis for
making  judgments  about  the carrying values of assets and liabilities that are
not  readily  apparent  from other sources. Actual results may differ from these
estimates  under  different  assumptions  or  conditions.

     We  believe  the following are our most critical accounting policies. These
policies  require significant judgments and estimates used in the preparation of
our  consolidated  financial  statements.

     Allowance  for  doubtful  accounts  -  We  establish  reserves for doubtful
accounts  on  a  case-by-case  basis  when  we  believe  the required payment of
specific  amounts  owed  to us is unlikely to occur. We derive a majority of our
revenue  from  services  to  international oil companies and government-owned or
government-controlled oil companies. Our receivables are concentrated in various
countries.  We  generally do not require collateral or other security to support
customer  receivables.  If  the  financial  condition  of  our  customers was to
deteriorate  or  their access to freely convertible currency was restricted, and
these  developments resulted in impairment of their ability to make the required
payments,  we  may  be  required  to  make  additional  allowances.

     Valuation  allowance  for  deferred  tax  assets  -  We  record a valuation
allowance  to  reduce  our deferred tax assets to the amount that is more likely
than  not  to  be  realized.  While we have considered future taxable income and
ongoing  prudent  and feasible tax planning strategies in assessing the need for
the  valuation  allowance,  should we determine that we would be able to realize
our  deferred  tax  assets in the future in excess of our net recorded amount an
adjustment  to  the valuation allowance would increase income in the period such
determination  was made. Likewise, should we determine that we would not be able
to  realize  all or part of our net deferred tax asset in the future we would be
required  to  make  an  adjustment to the valuation allowance. This would reduce
income  in  the  period  such  determination  was  made.

     Goodwill  impairment  - Effective January 1, 2002, we adopted the Financial
Accounting  Standards  Board's  ("FASB")  Statement  of  Financial  Accounting
Standards  ("SFAS")  142,  Goodwill  and  Other Intangibles. As a result of this
statement,  we no longer amortize goodwill but will perform a test of impairment
as of October 1 each year. Goodwill could be significantly impaired depending on
prevailing  market  conditions  and when in the business cycle the assessment is
performed  (see  "-Outlook").

     During  the  first  quarter  of  2002,  we  performed  the  initial test of
impairment  of  goodwill  on  our  two  reporting units, "International and U.S.
Floater  Contract  Drilling  Services"  and  "Gulf  of Mexico Shallow and Inland
Water."  The test was applied utilizing the fair value of the reporting units as
of  January  1, 2002 and was determined based on a combination of each reporting
unit's  discounted  cash  flows  and  publicly  traded  company  multiples  and
acquisition multiples of comparable businesses. There was no goodwill impairment
for  the  International  and  U.S.  Floater Contract Drilling Services reporting
unit.  However,  because  of  deterioration  in  the  Gulf of Mexico Shallow and
Inland  Water business segment since the completion of the R&B Falcon merger, we
recognized a $1,363.7 million impairment of goodwill as a cumulative effect of a
change in accounting principle in the quarter ended March 31, 2002. Our goodwill
balance,  after  giving effect to the goodwill write down, is $5.1 billion as of
September  30,  2002. See Note 2 to our consolidated financial statements in our
Annual  Report  on  Form  10-K.


                                       22
<PAGE>
     Contingent  liabilities  -  We  establish  reserves  for  estimated  loss
contingencies  when we believe a loss is probable and we can reasonably estimate
the  amount  of  the  loss. Revisions to contingent liabilities are reflected in
income  in  the  period  in which different facts or information become known or
circumstances  change  that  affect our previous assumptions with respect to the
likelihood or amount of loss. Reserves for contingent liabilities are based upon
our  assumptions  and  estimates  regarding  the probable outcome of the matter.
Should  the  outcome  differ  from  our  assumptions  and estimates, we would be
required to make revisions to the estimated reserves for contingent liabilities.

     Contract  preparation  and  mobilization  revenues  and expenses - Costs we
incur  to  prepare  and  mobilize  drilling units for new drilling contracts are
deferred  from  the  date  we  have  a  firm  commitment  from  the customer and
recognized  as operating and maintenance expense over the estimated primary term
of  the  drilling  contract.  Revenues  we  earned  during or as a result of the
contract  preparation  and mobilization periods are also deferred and recognized
over  the  estimated  primary  term  of  the  drilling  contract.  If a customer
prematurely terminates the contract, we would recognize any unamortized deferred
costs  and  revenues  in  the  period  the  contract  was  terminated.

OPERATING  RESULTS

QUARTER ENDED SEPTEMBER 30, 2002 COMPARED TO QUARTER ENDED SEPTEMBER 30, 2001

     Our  results  of  operations  are  aggregated  into  two  segments:  (i)
International  and  U.S.  Floater  Contract  Drilling  Services and (ii) Gulf of
Mexico  Shallow  and  Inland  Water.  Operating income (loss) before general and
administrative  expenses  for the three months ended September 30, 2002 and 2001
was  $190.0  million  and $187.4 million, respectively, in our International and
U.S.  Floater  Contract  Drilling  Services segment and $(38.1) million and $6.9
million,  respectively,  in our Gulf of Mexico Shallow and Inland Water segment.

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                              September 30,
                                                              --------------               %
                                                               2002    2001    Change   Change
                                                              ------  ------  --------  -------
                                                                (In millions, except % change)
<S>                                                           <C>     <C>     <C>       <C>
OPERATING REVENUES
  International and U.S. Floater Contract Drilling Services   $641.2  $641.5  $  (0.3)     -  %
  Gulf of Mexico Shallow and Inland Water                       54.0   128.7    (74.7)  (58.0)%
                                                              ------  ------  --------  -------
                                                              $695.2  $770.2  $ (75.0)   (9.7)%
                                                              ======  ======  ========  =======
</TABLE>

     Operating  revenues in the International and U.S. Floater Contract Drilling
Services segment were essentially unchanged for the three months ended September
30,  2002  compared  to  the  same  period  in 2001. The slight decrease in this
segment  was primarily due to a $9 million decrease from two rigs transferred to
assets  held  for  sale  subsequent  to  the third quarter of 2001, a $5 million
decrease  from  two  rigs  sold  subsequent  to  the third quarter of 2001, a $9
million  decrease  from  three  leased  rigs returned to their owners and an $11
million  decrease  related to the Deepwater Frontier following the expiration of
our  lease  with  a  related party late in 2001.  These decreases were partially
offset by a $16 million increase from a newbuild placed into service late in the
third quarter of 2001 and $8 million from two rigs transferred into this segment
from  the  Gulf  of  Mexico Shallow and Inland Water segment.  Revenues from the
remaining  core  assets in this segment increased $20 million.  Average dayrates
for these core assets increased from $89,000 for the quarter ended September 30,
2001  to  $95,100 for the quarter ended September 30, 2002 while utilization for
these  core assets decreased from 81 percent for the quarter ended September 30,
2001 to 78 percent for the quarter ended September 30, 2002.  Operating revenues
for non-core assets in this segment decreased $10 million and resulted primarily
from  the  sale  in the fourth quarter of 2001 of RBF FPSO L.P., which owned the
Seillean, the sale of a platform rig in early 2002 and loss of hire proceeds for
the  Jack  Bates in the third quarter of 2001 with no comparable activity in the
third  quarter  of 2002 partially offset by the settlement of a contract dispute
in  the  third  quarter  of  2002.


                                       23
<PAGE>
     The  decrease  in  the  Gulf  of  Mexico Shallow and Inland Water operating
revenues  resulted  primarily  from the continued weakness of the Gulf of Mexico
shallow  and  inland water market segment, a decline that began in mid-2001, and
the  transfer  of three jackup rigs from this segment into the International and
U.S. Floater Contract Drilling Services segment, which represented a decrease of
$6  million  in  revenues.  Excluding the three jackup rigs transferred into the
International  and  U.S.  Floater  Contract  Drilling  Services segment, average
dayrates  and utilization for core assets in this segment decreased from $29,500
and  63  percent,  respectively,  for  the  quarter  ended September 30, 2001 to
$21,600  and 41 percent, respectively, for the quarter ended September 30, 2002.
Revenues  from non-core assets in this segment decreased $11 million and related
primarily  to  Venezuela  where  average dayrates and utilization decreased from
$19,700  and  83 percent, respectively, for the three months ended September 30,
2001 to $17,000 and 16 percent, respectively, for the comparable period in 2002.

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                              September 30,
                                                              --------------               %
                                                               2002    2001    Change   Change
                                                              ------  ------  --------  -------
                                                                (In millions, except % change)
<S>                                                           <C>     <C>     <C>       <C>
OPERATING AND MAINTENANCE
  International and U.S. Floater Contract Drilling Services   $325.7  $330.5  $  (4.8)   (1.5)%
  Gulf of Mexico Shallow and Inland Water                       55.4    87.7    (32.3)  (36.8)%
                                                              ------  ------  --------  -------
                                                              $381.1  $418.2  $ (37.1)   (8.9)%
                                                              ======  ======  ========  =======
</TABLE>

     The  decrease  in International and U.S. Floater Contract Drilling Services
operating  expenses  resulted  primarily  from  the  stacking  of rigs, two rigs
transferred to assets held for sale subsequent to the third quarter in 2001, two
rigs sold subsequent to the third quarter in 2001, three leased rigs returned to
their  owners  and  a  decrease  related to the Deepwater Frontier following the
expiration of our lease with a related party late in 2001. In addition, the sale
of  the RBF FPSO L.P., which owned the Seillean, subsequent to the third quarter
in  2001  further  contributed  to  the decrease. These decreases were partially
offset  by  an  increase from a newbuild unit placed into service and two jackup
rigs  transferred  into  this segment from the Gulf of Mexico Shallow and Inland
Water  segment  during  and  subsequent  to  the  third  quarter  of  2001,  the
accelerated amortization of the Pride North Atlantic's (formerly the Drill Star)
deferred  gain,  which produced incremental gains in the quarter ended September
30,  2001  of  $13.6  million  with no equivalent expense reduction in the third
quarter  of  2002  and  $6.5  million  related  to  restructuring  charges and a
litigation  provision  with no comparable activity in the third quarter of 2001.

     The  decrease in Gulf of Mexico Shallow and Inland Water operating expenses
was  primarily  due  to  lower  costs  in  2002  resulting from the stacking and
scrapping  of idle rigs and reducing employee count coupled with the transfer of
three  jackup  rigs  out of this segment into the International and U.S. Floater
Contract Drilling Services segment during and subsequent to the third quarter of
2001.  These  decreases were partially offset by an increase in expenses of $4.4
million  resulting  from severance-related costs and other restructuring charges
related  to  our  decision  to  close  an administrative office and warehouse in
Louisiana  and  relocate  most  of  the  operations and administrative functions
previously  conducted at that location, as well as compensation-related expenses
due  to  executive  management  changes  in  the  third  quarter  of  2002.


                                       24
<PAGE>
<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                              September 30,
                                                              --------------               %
                                                               2002    2001    Change   Change
                                                              ------  ------  --------  -------
                                                                (In millions, except % change)
<S>                                                           <C>     <C>     <C>       <C>
DEPRECIATION
  International and U.S. Floater Contract Drilling Services.  $101.6  $ 98.1  $   3.5      3.6%
  Gulf of Mexico Shallow and Inland Water                       22.6    27.3     (4.7)  (17.2)%
                                                              ------  ------  --------  -------
                                                              $124.2  $125.4  $  (1.2)   (0.1)%
                                                              ======  ======  ========  =======
</TABLE>

     The  increase  in International and U.S. Floater Contract Drilling Services
depreciation  expense  resulted  primarily  from a newbuild drilling unit placed
into service during the third quarter of 2001, the transfer of three jackup rigs
into  this  segment  from  the  Gulf  of Mexico Shallow and Inland Water segment
during  and  subsequent  to the third quarter of 2001 and certain purchase price
adjustments  related  to  the R&B Falcon merger recorded in the third quarter of
2001.  This  increase  was  partially offset by lower expense resulting from the
suspension  of  depreciation on certain rigs transferred to assets held for sale
and  the sale of various rigs from our active fleet during and subsequent to the
third  quarter  of  2001.

     The  decrease  in  Gulf  of  Mexico  Shallow  and Inland Water depreciation
expense  resulted  primarily  from the movement of three jackup rigs out of this
segment  into  the  International  and  U.S.  Floater Contract Drilling Services
segment and the sale of various rigs from our active fleet during and subsequent
to  the  third  quarter  of  2001.

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                              September 30,
                                                              ------------               %
                                                              2002   2001    Change   Change
                                                              -----  -----  --------  ------
                                                              (In millions, except % change)
<S>                                                           <C>    <C>    <C>       <C>
GOODWILL AMORTIZATION
  International and U.S. Floater Contract Drilling Services.  $   -  $30.5  $ (30.5)     N/A
  Gulf of Mexico Shallow and Inland Water                         -   11.2    (11.2)     N/A
                                                              -----  -----  --------  ------
                                                              $   -  $41.7  $ (41.7)     N/A
                                                              =====  =====  ========  ======
</TABLE>

     We adopted SFAS 142, Goodwill and Other Intangible Assets, as of January 1,
2002.  As  a  result,  goodwill  is  no  longer  amortized  but  is reviewed for
impairment  at  least  annually  on  October  1.  See  Note  2  to our condensed
consolidated  financial  statements.

<TABLE>
<CAPTION>
                             Three Months Ended
                                September 30,
                                ------------             %
                                2002   2001   Change   Change
                                -----  -----  -------  ------
                                (In millions, except % change)
<S>                             <C>    <C>    <C>      <C>

GENERAL AND ADMINISTRATIVE      $15.8  $14.5  $   1.3     9.0%
                                =====  =====  =======  =======
</TABLE>

     General and administrative expense for the three months ended September 30,
2002  increased  primarily  as  a  result  of  higher  pension  expense.


                                       25
<PAGE>
<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                            September 30,
                                                            ------------              %
                                                            2002   2001    Change  Change
                                                            -----  -----  -------  ------
                                                            (In millions, except % change)
<S>                                                         <C>    <C>    <C>      <C>
IMPAIRMENT LOSS ON LONG-LIVED ASSETS
  International and U.S. Floater Contract Drilling Services $25.7  $   -  $  25.7     N/A
  Gulf of Mexico Shallow and Inland Water                    15.2      -     15.2     N/A
                                                            -----  -----  -------  ------
                                                            $40.9  $   -  $  40.9     N/A
                                                            =====  =====  =======  ======
</TABLE>

     During  the  three  months  ended  September 30, 2002, we recorded non-cash
impairment  charges  in  the  International  and  U.S. Floater Contract Drilling
Services  segment  of $20.2 million and in the Gulf of Mexico Shallow and Inland
Water  segment of $15.2 million relating to assets held for sale reclassified as
assets  held  and  used.  The  impairment  of  these  assets  resulted  from our
assessment that these assets no longer met the held for sale criteria under SFAS
144. In accordance with SFAS 144 the carrying value of these assets was adjusted
to  the  lower  of fair market value or carrying value adjusted for depreciation
from  the  date  the  assets  were  classified as held for sale. The fair market
values  were based on third party valuations. In addition, an impairment of $5.5
million,  determined  based  on an offer from a potential buyer, was recorded in
the  International  and U.S. Floater Contract Drilling Services segment relating
to  other  assets  held  for  sale.

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                              September 30,
                                                              ------------              %
                                                              2002   2001    Change   Change
                                                              -----  -----  --------  ------
                                                               (In millions, except % change)
<S>                                                           <C>    <C>    <C>       <C>
GAIN (LOSS) FROM SALE OF ASSETS, NET
  International and U.S. Floater Contract Drilling Services   $ 1.8  $ 5.0  $  (3.2)  (64.0)%
  Gulf of Mexico Shallow and Inland Water                       1.1    4.4     (3.3)  (75.0)%
                                                              -----  -----  --------  -------
                                                              $ 2.9  $ 9.4  $  (6.5)  (69.1)%
                                                              =====  =====  ========  =======
</TABLE>

     During  the  three  months  ended September 30, 2002, the International and
U.S.  Floater Contract Drilling Services segment recognized net pre-tax gains of
$2.2 million resulting from the partial settlement of an insurance claim and the
sale  of  certain non-strategic assets partially offset by a net pre-tax loss of
$0.4  million from the sale of an office building. During the three months ended
September  30,  2001,  this  segment  recognized  a pre-tax gain of $3.7 million
related  to  the  sale  of two Nigerian-based land rigs and net pre-tax gains of
$1.3  million  related  to  the  sale  of  certain  non-strategic  assets.

     During  the  three  months  ended  September  30,  2002, the Gulf of Mexico
Shallow  and  Inland  Water segment recognized net pre-tax gains of $1.1 million
related  to  the sale of a land rig and certain non-strategic assets. During the
three months ended September 30, 2001, this segment recognized net pre-tax gains
of  $2.1  million  related  to the disposal of an inland drilling barge and $2.3
million  related  to  the  sale  of  certain  non-strategic  assets.


                                       26
<PAGE>
<TABLE>
<CAPTION>
                                                Three Months Ended
                                                   September 30,
                                                 ----------------              %
                                                  2002     2001     Change   Change
                                                 -------  -------  --------  ------
                                                   (In millions, except % change)
<S>                                              <C>      <C>      <C>       <C>
OTHER INCOME (EXPENSE), NET
  Equity in earnings of joint ventures           $  0.4   $  6.3   $  (5.9)  (93.7)%
  Interest income                                   6.1      5.5       0.6     10.9%
  Interest expense, net of amounts capitalized    (52.3)   (60.8)      8.5     14.0%
  Other, net                                        1.3     (0.5)      1.8    360.0%
                                                 -------  -------  --------  ------
                                                 $(44.5)  $(49.5)  $   5.0     10.1%
                                                 =======  =======  ========  ======
</TABLE>

     The  decrease in equity in earnings of joint ventures was primarily related
to  our  25  percent share of losses from Delta Towing L.L.C. and a reduction of
earnings  from  our 50 percent interest in Deepwater Drilling L.L.C. ("DD LLC"),
which  owns  the  Deepwater  Pathfinder.  The  increase  in  interest income was
primarily  due  to interest earned on higher average cash balances for the three
months  ended  September  30, 2002 compared to the same period in 2001 partially
offset  by  lower  interest  rates  on  those balances. The decrease in interest
expense  was  attributable  to  a  $2.2  million  reduction associated with debt
refinancing  and  retirements during and subsequent to the third quarter of 2001
and  a  decrease in the London Interbank Offered Rate ("LIBOR") of approximately
181 basis points that resulted in a $2.0 million reduction on floating rate bank
debt.  Additionally, our fixed to floating interest rate swaps resulted in lower
interest  expense  of $8.1 million. These decreases were partially offset by the
absence  of  capitalized  interest  in  the  third  quarter  of 2002, due to the
completion  of  our  newbuild  projects  in  2001,  compared  to  $4  million of
capitalized  interest  in  the  third  quarter  of  2001.

<TABLE>
<CAPTION>
                               Three Months Ended
                                  September 30,
                                ---------------                %
                                  2002    2001    Change    Change
                                --------  -----  --------  --------
                                   (In millions, except % change)
<S>                             <C>       <C>    <C>       <C>

INCOME TAX EXPENSE (BENEFIT)    $(164.8)  $32.6  $(197.4)  (605.5)%
                                ========  =====  ========  ========
</TABLE>

     We  operate  internationally  and provide for income taxes based on the tax
laws and rates in the countries in which we operate and earn income. There is no
expected  relationship  between the provision for income taxes and income before
income  taxes.  The three months ended September 30, 2002 included a tax benefit
of  $176.2  million  attributable  to  the  restructuring  of  certain  non-U.S.
operations.

NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2001

     Our  results  of  operations  are  aggregated  into  two  segments:  (i)
International  and  U.S.  Floater  Contract  Drilling  Services and (ii) Gulf of
Mexico  Shallow  and  Inland  Water.  Operating income (loss) before general and
administrative  expenses  for  the nine months ended September 30, 2002 and 2001
was $570.8 million and $420.9 million, respectively, in our International and U.
S.  Floater  Contract  Drilling  Services segment and $(101.8) million and $55.4
million, respectively, in our Gulf of Mexico Shallow and Inland Water segment.


                                       27
<PAGE>
<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                                September 30,
                                                              -----------------               %
                                                                2002      2001     Change   Change
                                                              --------  -------  ---------  -------
                                                                 (In millions, except % change)
<S>                                                           <C>       <C>       <C>       <C>
OPERATING REVENUES
  International and U.S. Floater Contract Drilling Services   $1,873.5  $1,706.7  $ 166.8      9.8%
  Gulf of Mexico Shallow and Inland Water                        135.8     365.8   (230.0)  (62.9)%
                                                              --------  -------  ---------  -------
                                                              $2,009.3  $2,072.5  $ (63.2)   (3.0)%
                                                              ========  =======  =========  =======
</TABLE>

     The  increase  in International and U.S. Floater Contract Drilling Services
operating  revenues  resulted  from an $87 million increase from R&B Falcon core
assets  in  this  segment  representing  a  full nine months of revenues in 2002
compared  to  eight  months  of operations in 2001, a $108 million increase from
four  newbuild  drilling  units placed into service during and subsequent to the
first nine months of 2001 and a $26 million increase from three rigs transferred
into  this  segment  from  the  Gulf  of Mexico Shallow and Inland Water segment
during  and  subsequent  to  the  third  quarter of 2001. In addition, operating
revenues  relating to historical Transocean core assets totaled $1.2 billion for
the  nine  months  ended  September 30, 2002, representing a $109 million, or 10
percent,  increase  over  the  comparable  2001  period.  Average  dayrates  and
utilization  for  these historical Transocean core assets increased from $80,100
and  77  percent,  respectively, for the nine months ended September 30, 2001 to
$87,000  and  79  percent, respectively, for the nine months ended September 30,
2002. These increases were partially offset by a $30 million decrease related to
the  Deepwater  Frontier  following  the  expiration of our lease with a related
party  late  in  2001, a $29 million decrease from three leased rigs returned to
their owners, a $19 million decrease related to two rigs transferred to held for
sale  and  an  $11  million  decrease related to rigs sold during 2001 and 2002.
Revenues  from  non-core  assets decreased $67 million for the nine months ended
September 30, 2002 compared to the same period in 2001 primarily due to the sale
of the RBF FPSO L.P., which owned the Seillean, a decrease of $38 million due to
the  winding  up of our turnkey drilling business early in 2001 and loss of hire
proceeds  in  2001  for  the  Jack  Bates  partially offset by a settlement of a
contract  dispute  in  2002.

     Although  the  Gulf  of  Mexico Shallow and Inland Water operating revenues
represent  a  full nine months of operations in 2002 compared to eight months of
operations  in  2001,  revenues decreased mainly due to the further weakening of
the Gulf of Mexico Shallow and Inland Water market segment, a decline that began
in  mid-2001.  In  addition, the transfer of three jackup rigs from this segment
into  the  International  and  U.S.  Floater  Contract Drilling Services segment
resulted  in a $24 million decrease. Excluding the three jackup rigs transferred
into  the  International  and  U.S.  Floater Contract Drilling Services segment,
average  dayrates and utilization for core assets in this segment decreased from
$29,400  and  67  percent, respectively, for the nine months ended September 30,
2001  to  $21,000  and  32  percent,  respectively,  for  the  nine months ended
September  30, 2002. Revenues from non-core assets in this segment decreased $22
million  and  related  primarily  to  Venezuela  where  average  dayrates  and
utilization  decreased  from  $20,000 and 83 percent, respectively, for the nine
months ended September 30, 2001 to $19,000 and 28 percent, respectively, for the
comparable  period  in  2002.


                                       28
<PAGE>
<TABLE>
<CAPTION>
                                                              Nine Months Ended
                                                                September 30,
                                                              ------------------               %
                                                                2002      2001     Change   Change
                                                              --------  --------  --------  ------
                                                                 (In millions, except % change)
<S>                                                           <C>       <C>       <C>       <C>
OPERATING AND MAINTENANCE
  International and U.S. Floater Contract Drilling Services   $  974.5  $  953.7  $  20.8      2.2%
  Gulf of Mexico Shallow and Inland Water                        153.2     209.8    (56.6)  (27.0)%
                                                              --------  --------  --------  -------
                                                              $1,127.7  $1,163.5  $ (35.8)   (3.1)%
                                                              ========  ========  ========  =======
</TABLE>

     The  increase  in International and U.S. Floater Contract Drilling Services
operating  expenses  was  primarily  a  result  of  eight  months  of R&B Falcon
operations  for  the  period  ended  September  30, 2001 compared to a full nine
months of activity for the same period in 2002, the activation of three newbuild
drilling units and three jackup rigs transferred into this segment from the Gulf
of  Mexico  Shallow  and Inland Water segment during and subsequent to the third
quarter  of  2001  and  accelerated  amortization  of the Pride North Atlantic's
deferred  gain,  which  produced  incremental  gains  in  the  nine months ended
September  30, 2001 of $36.3 million with no equivalent expense reduction in the
first nine months of 2002. These increases were partially offset by decreases in
expenses  resulting from a rig transferred to assets held for sale subsequent to
the  third  quarter of 2001, nine rigs sold during and subsequent to 2001, three
leased  rigs  returned  to  their  owners,  a  decrease related to the Deepwater
Frontier following the expiration of our lease with a related party late in 2001
and  the  winding  up  of  our  turnkey  drilling  business  in  2001.

     The  decrease in Gulf of Mexico Shallow and Inland Water operating expenses
in the nine months ended September 30, 2002 resulted primarily from the stacking
and  scrapping  of  rigs,  the sale of an inland drilling barge during the third
quarter of 2001, reducing employee count and lower maintenance costs, as well as
the transfer of three jackup rigs out of this segment into the International and
U.S.  Floater  Contract  Drilling  Services segment during and subsequent to the
third  quarter  of  2001.  These  decreases were partially offset by a full nine
months  of  R&B Falcon operations in 2002 compared to eight months of operations
in  2001,  an  increase  in  expenses  of  $4.4  million  resulting  from
severance-related  costs and other restructuring charges related to our decision
to  close  an administrative office and warehouse in Louisiana and relocate most
of  the  operations  and  administrative  functions previously conducted at that
location,  as  well  as  compensation-related  expenses resulting from executive
management  changes  in  the  third  quarter  of  2002.

<TABLE>
<CAPTION>
                                                            Nine Months Ended
                                                              September 30,
                                                             --------------                %
                                                               2002    2001    Change   Change
                                                              ------  ------  --------  -------
                                                               (In millions, except % change)
<S>                                                           <C>     <C>     <C>       <C>
DEPRECIATION
  International and U.S. Floater Contract Drilling Services   $305.3  $272.6  $  32.7     12.0%
  Gulf of Mexico Shallow and Inland Water                       68.8    75.7     (6.9)   (9.1)%
                                                              ------  ------  --------  -------
                                                              $374.1  $348.3  $  25.8      7.4%
                                                              ======  ======  ========  =======
</TABLE>

     The  increase  in International and U.S. Floater Contract Drilling Services
depreciation  expense resulted primarily from a full nine months of depreciation
in  2002  on rigs acquired in the R&B Falcon merger compared to eight months for
the same period in 2001, four newbuild drilling units placed into service during
and subsequent to the first nine months of 2001 and the transfer of three jackup
rigs into this segment from the Gulf of Mexico Shallow and Inland Water segment.
This  increase  was partially offset by lower depreciation expense following the
suspension  of  depreciation on certain rigs transferred to assets held for sale
and  the  sale  of  various  rigs  classified as assets held and used during and
subsequent  to  2001.


                                       29
<PAGE>
     The  decrease  in  Gulf  of  Mexico  Shallow  and Inland Water depreciation
expense  resulted  primarily  from the transfer of three jackup rigs out of this
segment  into  the  International  and  U.S.  Floater Contract Drilling Services
segment,  the suspension of depreciation on a rig transferred to assets held for
sale  and the sale of various rigs classified as assets held and used during and
subsequent  to 2001. These decreases were partially offset by a full nine months
of  depreciation  in  2002 on rigs acquired in the R&B Falcon merger compared to
eight  months  for  the  same  period  in  2001.

<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                              September 30,
                                                              -------------               %
                                                              2002    2001    Change   Change
                                                              -----  ------  --------  ------
                                                               (In millions, except % change)
<S>                                                           <C>    <C>     <C>       <C>
GOODWILL AMORTIZATION
  International and U.S. Floater Contract Drilling Services.  $  -   $ 83.6  $ (83.6)     N/A
  Gulf of Mexico Shallow and Inland Water                        -     29.8    (29.8)     N/A
                                                              -----  ------  --------  ------
                                                              $  -   $113.4  $(113.4)     N/A
                                                              =====  ======  ========  ======
</TABLE>

     We adopted SFAS 142, Goodwill and Other Intangible Assets, as of January 1,
2002.  As  a  result,  goodwill  is  no  longer  amortized  but  is reviewed for
impairment  at  least  annually  on  October  1.  See  Note  2  to our condensed
consolidated  financial  statements.

<TABLE>
<CAPTION>
                              Nine Months Ended
                                September 30,
                                ------------              %
                                2002   2001   Change   Change
                                -----  -----  -------  -------
                                (In millions, except % change)
<S>                             <C>    <C>    <C>      <C>
GENERAL AND ADMINISTRATIVE      $51.6  $43.9  $   7.7    17.5%
                                =====  =====  =======  =======
</TABLE>

     The  increase  in  general  and  administrative  expense  was  primarily
attributable  to  $3.9  million of costs related to the exchange of our debt for
R&B Falcon debt in March 2002. The nine months ended September 30, 2001 included
a  $1.3  million  reduction in expense related to the favorable settlement of an
unemployment  tax  assessment with no corresponding reduction in the nine months
ended  September  30, 2002. In addition, expense increased due to the R&B Falcon
merger  and  reflects  additional  costs  to  manage  a  larger,  more  complex
organization  for  a  full nine months in 2002 compared to eight months in 2001.

<TABLE>
<CAPTION>
                                                            Nine Months Ended
                                                              September 30,
                                                              ------------             %
                                                              2002   2001   Change   Change
                                                              -----  -----  -------  ------
                                                              (In millions, except % change)
<S>                                                           <C>    <C>    <C>      <C>
IMPAIRMENT LOSS ON LONG-LIVED ASSETS
  International and U.S. Floater Contract Drilling Services   $25.7  $   -  $  25.7     N/A
  Gulf of Mexico Shallow and Inland Water                      16.3      -     16.3     N/A
                                                              -----  -----  -------  ------
                                                              $42.0  $   -  $  42.0     N/A
                                                              =====  =====  =======  ======
</TABLE>

     During  the  nine  months  ended  September  30, 2002, we recorded non-cash
impairment  charges  in  the  International  and  U.S. Floater Contract Drilling
Services  segment  of $20.2 million and in the Gulf of Mexico Shallow and Inland
Water  segment of $15.2 million relating to assets held for sale reclassified as
assets  held  and  used.  The  impairment  of  these  assets  resulted  from our
assessment that these assets no longer met the held for sale criteria under SFAS
144.  In  accordance  with  SFAS  144,  the  carrying  value of these assets was


                                       30
<PAGE>
adjusted  to  the  lower  of  fair  market  value or carrying value adjusted for
depreciation from the date the assets were classified as held for sale. The fair
market  values  were based on third party valuations. In addition, an impairment
of  $5.5  million,  determined  based  on  an  offer from a potential buyer, was
recorded  in  the  International  and  U.S.  Floater  Contract Drilling Services
segment  relating  to  other  assets  held for sale. We also recorded a non-cash
impairment charge in the Gulf of Mexico Shallow and Inland Water segment of $1.1
million  relating  to  an  asset  held  for  sale.  The impairment resulted from
deterioration in current market conditions and was determined and measured based
on  an  offer  from  a  potential  buyer.

<TABLE>
<CAPTION>
                                                            Nine Months Ended
                                                              September 30,
                                                              ------------              %
                                                              2002   2001    Change   Change
                                                              -----  -----  --------  -------
                                                              (In millions, except % change)
<S>                                                           <C>    <C>    <C>       <C>
GAIN FROM SALE OF ASSETS, NET
  International and U.S. Floater Contract Drilling Services   $ 2.8  $24.1  $ (21.3)  (88.4)%
  Gulf of Mexico Shallow and Inland Water                       0.7    4.9     (4.2)  (85.7)%
                                                              -----  -----  --------  -------
                                                              $ 3.5  $29.0  $ (25.5)  (87.9)%
                                                              =====  =====  ========  =======
</TABLE>

     During the nine months ended September 30, 2002, the International and U.S.
Floater  Contract Drilling Services segment recognized net pre-tax gains of $5.6
million  related  to  the  sale  of  the  Transocean 96, Transocean 97, a mobile
offshore  production  unit, the partial settlement of an insurance claim and the
sale  of  certain non-strategic assets. These net gains were partially offset by
net  pre-tax  losses  of $2.8 million from the sale of the RBF 209 and an office
building.  During  the  nine  months  ended  September  30,  2001,  this segment
recognized  net  pre-tax  gains  of  $18.5  million  related  to the accelerated
amortization  of  the  deferred  gain  on  the  sale of the Sedco Explorer, $3.7
million  related  to  the  sale of two Nigerian-based land rigs and $1.9 million
from  the  sale  of  certain  non-strategic  assets.

     During the nine months ended September 30, 2002, the Gulf of Mexico Shallow
and  Inland  Water  segment  recognized net pre-tax gains of $2.1 million on the
sale  of  a  land  rig  and certain non-strategic assets partially offset by net
pre-tax  losses  of  $1.4  million  related  to  the sale of two mobile offshore
production  units  and  a  land  rig. During the nine months ended September 30,
2001,  this  segment recognized net pre-tax gains of $2.1 million related to the
disposal  of  an  inland  drilling barge and $2.8 million related to the sale of
certain  non-strategic  assets.

<TABLE>
<CAPTION>
                                                 Nine Months Ended
                                                    September 30,
                                                 ------------------              %
                                                   2002      2001     Change   Change
                                                 --------  --------  --------  -------
                                                     (In millions, except % change)
<S>                                              <C>       <C>       <C>       <C>
OTHER INCOME (EXPENSE), NET
  Equity in earnings of joint ventures           $   4.8   $  12.0   $  (7.2)  (60.0)%
  Interest income                                   16.0      13.7       2.3     16.8%
  Interest expense, net of amounts capitalized    (160.7)   (164.8)      4.1      2.5%
  Other, net                                         0.2      (2.0)      2.2    110.0%
                                                 --------  --------  --------  -------
                                                 $(139.7)  $(141.1)  $   1.4      1.0%
                                                 ========  ========  ========  =======
</TABLE>

     The  decrease in equity in earnings of joint ventures was primarily related
to  our  25  percent share of losses from Delta Towing L.L.C. and to the reduced
earnings  attributable  to  our  60  percent  share of the earnings of Deepwater
Drilling  II  L.L.C. ("DDII LLC"), which owns the Deepwater Frontier, and our 50
percent  share  of  DD  LLC,  which  owns  the  Deepwater  Pathfinder. Both rigs
experienced  downtime  and decreased utilization during the first nine months of
2002.  These decreases were partially offset by losses recorded in February 2001
on  the sale of the Drill Star and Sedco Explorer by a joint venture in which we
own  a 25 percent interest. The increase in interest income was primarily due to
interest  earned  on  higher  average  cash  balances  for the nine months ended
September 30, 2002 compared to the same period in 2001. The decrease in interest
expense  was  attributable  to  reductions  in interest expense of $30.8 million
associated  with  debt  refinancing and retirements during and subsequent to the


                                       31
<PAGE>
nine  months  ended  September 30, 2001 and a decrease in LIBOR of approximately
283 basis points that resulted in a $9.0 million reduction on floating rate bank
debt.  Additionally,  our  fixed  to  floating  interest  rate swaps resulted in
reduced  interest  expense  of  $33.1  million.  Offsetting these decreases were
$24.6  million  of  additional interest expense on debt issued during the second
quarter  of  2001,  $8.5 million of interest expense on debt acquired in the R&B
Falcon  merger,  which  represents  additional  interest in the full nine months
ended  September  30, 2002 compared to eight months for the comparable period in
2001  and the absence of capitalized interest in the nine months ended September
30,  2002,  due  to the completion of our newbuild projects in 2001, compared to
$34.9  million  of  capitalized  interest for the comparable period in 2001. The
increase  in other, net was due primarily to a loss on sale of securities during
the  nine  months  ended  September 30, 2001. No securities were sold during the
same  period  in  2002.

<TABLE>
<CAPTION>
                                Nine Months Ended
                                  September 30,
                                ---------------                %
                                  2002    2001    Change    Change
                                --------  -----  --------  --------
                                  (In millions, except % change)
<S>                             <C>       <C>    <C>       <C>
INCOME TAX EXPENSE (BENEFIT)    $(137.1)  $74.9  $(212.0)  (283.0)%
                                ========  =====  ========  ========
</TABLE>

     We  operate  internationally  and provide for income taxes based on the tax
laws and rates in the countries in which we operate and earn income. There is no
expected  relationship  between the provision for income taxes and income before
income taxes. The nine months ended September 30, 2002 included a tax benefit of
$175.7 million attributable to the restructuring of certain non-U.S. operations.

<TABLE>
<CAPTION>
                                        Nine Months Ended
                                           September 30,
                                          --------------             %
                                          2002    2001    Change   Change
                                          -----  -------  -------  ------
                                           (In millions, except % change)
<S>                                       <C>    <C>      <C>      <C>
LOSS ON EXTRAORDINARY ITEMS, NET OF TAX.  $   -  $(17.3)  $  17.3     N/A
                                          =====  =======  =======  ======
</TABLE>

     During  the  nine  months  ended  September 30, 2001, we recognized a $17.3
million  extraordinary  loss, net of tax, related to the early extinguishment of
debt  as described in Note 4 to our condensed consolidated financial statements.

<TABLE>
<CAPTION>
                                                        Nine Months Ended
                                                          September 30,
                                                        -----------------                %
                                                           2002     2001     Change    Change
                                                        ----------  -----  ----------  ------
                                                            (In millions, except % change)
<S>                                                     <C>         <C>    <C>         <C>

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE.  $(1,363.7)  $   -  $(1,363.7)     N/A
                                                        ==========  =====  ==========  ======
</TABLE>

     During  the  nine months ended September 30, 2002, we recognized a $1,363.7
million  cumulative  effect  of  a change in accounting principle related to the
implementation  of  SFAS  142 as more fully described in Note 2 to our condensed
consolidated  financial  statements.


                                       32
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL  CONDITION

                                                             September 30,   December 31,                  %
                                                                  2002           2001         Change    Change
                                                             --------------  -------------  ----------  -------
<S>                                                          <C>             <C>            <C>         <C>
TOTAL ASSETS
  International and U.S. Floater Contract Drilling Services  $     14,252.1  $    14,219.3  $    32.8      0.2%
  Gulf of Mexico Shallow and Inland Water                           1,258.0        2,800.5   (1,542.5)  (55.1)%
                                                             --------------  -------------  ----------  -------
                                                             $     15,510.1  $    17,019.8  $(1,509.7)   (8.9)%
                                                             ==============  =============  ==========  =======
</TABLE>

     The  decrease  in  Gulf  of  Mexico  Shallow  and  Inland  Water assets was
primarily  due  to the impairment of goodwill of $1.4 billion as a result of our
adoption  of  SFAS  142  in  January  2002.

RESTRUCTURING  CHARGES

     In  conjunction  with  the R&B Falcon merger, we established a liability of
$16.5  million  for  the  estimated  severance-related costs associated with the
involuntary  termination  of  569  R&B Falcon employees pursuant to management's
plan  to  consolidate  operations  and  administrative  functions  post-merger.
Included  in the 569 planned involuntary terminations were 387 employees engaged
in  our  land drilling business in Venezuela. We have suspended active marketing
efforts  to  divest  this business and, as a result, the estimated liability was
reduced by $4.3 million in the third quarter of 2001 with an offset to goodwill.
Through  September  30, 2002 all required severance-related costs have been paid
to  182  employees  whose  positions  were  eliminated as a result of this plan.

     In  September  2002,  we  committed  to  a  restructuring  plan  in  the
International  and  U.S. Floater Contract Drilling services segment to close its
engineering  office  in  Montrouge,  France.  We established a liability of $2.8
million  for  the  estimated  severance-related  costs  associated  with  the
involuntary  termination  of  16 employees pursuant to this plan. The charge was
reported  as  operating  and  maintenance  expense in our condensed consolidated
statements  of operations.  Through September 30, 2002, no amounts had been paid
to  employees  whose positions are being eliminated as a result of this plan. We
anticipate  that  substantially all amounts will be paid by the end of the first
quarter  of  2003.

     In  September  2002,  we  committed  to  a  restructuring  plan  in  the
International  and  U.S.  Floater Contract Drilling services segment for a staff
reduction  in  Norway  as  a  result of a decline in activity in that region. We
established  a  liability  of  $1.2  million for the estimated severance-related
costs  associated  with  the  involuntary termination of 8 employees pursuant to
this  plan.  The charge was reported as operating and maintenance expense in our
condensed  consolidated statements of operations. Through September 30, 2002, no
amounts  had  been  paid  to employees whose positions are being eliminated as a
result  of  this plan. We anticipate that substantially all amounts will be paid
by  the  end  of  the  first  quarter  of  2004.

     In  September  2002,  we  committed  to a restructuring plan in the Gulf of
Mexico  Shallow  and  Inland  Water  segment  involving closure of an office and
warehouse  in  Louisiana  and  relocation  of  most  of  the  operations  and
administrative functions previously conducted at that location. We established a
liability  of  $1.2 million for the estimated severance-related costs associated
with  the  involuntary  termination  of  57 employees pursuant to this plan. The
charge  was  reported  as  operating  and  maintenance  expense in our condensed
consolidated  statements  of  operations. Through September 30, 2002, no amounts
had  been  paid to employees whose employment is being terminated as a result of
this  plan. We anticipate that substantially all amounts will be paid by the end
of  the  first  quarter  of  2003.

2001  R&B  FALCON  PRO  FORMA  OPERATING  RESULTS

     Our  unaudited  pro  forma  consolidated  results for the nine months ended
September 30, 2001, giving effect to the R&B Falcon merger, reflected net income
of  $202.7  million, or $0.63 per diluted share, on pro forma operating revenues
of  $2,198.4  million.  The  pro  forma  operating results assume the merger was
completed  as  of  January  1,  2001  (see  Note 3 to our condensed consolidated
financial  statements).  These  pro  forma results do not reflect the effects of
reduced  depreciation  expense  related to conforming the estimated lives of our
drilling  rigs.  The  pro  forma  financial  data  should not be relied on as an


                                       33
<PAGE>
indication of operating results that we would have achieved had the merger taken
place  earlier  or  of  the  future  results  that  we  may  achieve.

OUTLOOK

     Within  our  International  and  U.S.  Floater  Contract  Drilling Services
business  segment,  average  dayrates during the third quarter of 2002 increased
slightly  compared  to  the second quarter of 2002 despite a decrease in average
dayrates for our high-specification floaters.  Similarly, utilization within the
segment  increased  modestly  during  the  third quarter of 2002 compared to the
previous  quarter.  Within  our Gulf of Mexico Shallow and Inland Water business
segment,  average  dayrates and fleet utilization increased in the third quarter
of  2002  compared  to  the  previous  quarter.


                                       34
<PAGE>
     Comparative  average  dayrates  and  utilization  figures  for the quarters
ending  September 30, 2002 and 2001 and the quarter ending June 30, 2002 are set
forth  in  the  table  below.

<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                     --------------------------------------------
                                                                      September 30,    June 30,    September 30,
                                                                          2002           2002          2001
                                                                     ---------------  ----------  ---------------
<S>                                                                  <C>              <C>         <C>
AVERAGE DAYRATES

INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING SERVICES SEGMENT:
     High-Specification Floaters                                     $      144,600   $ 150,200   $      144,800
     Other Floaters                                                          81,300      76,800           66,600
     Jackups - Non-U.S.                                                      60,400      57,400           49,200
     Other (a)                                                               55,100      43,700           42,500
                                                                     ---------------  ----------  ---------------
Segment Total (a)                                                            95,500      94,500           86,700
                                                                     ---------------  ----------  ---------------

GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
     Jackups and Submersibles                                                23,000      21,000           37,700
     Inland Barges                                                           20,700      20,200           24,400
                                                                     ---------------  ----------  ---------------
Segment Total (a)                                                            21,600      20,700           30,000
                                                                     ---------------  ----------  ---------------

Total (a)                                                            $       76,400   $  80,500   $       66,900
                                                                     ===============  ==========  ===============

UTILIZATION

INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING SERVICES SEGMENT:
     High-Specification Floaters                                                 85%         85%              87%
     Other Floaters                                                              76%         73%              82%
     Jackups - Non-U.S.                                                          84%         82%              84%
     Other (a)                                                                   51%         60%              48%
                                                                     ---------------  ----------  ---------------
Segment Total (a)                                                                79%         78%              81%
                                                                     ---------------  ----------  ---------------

GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
     Jackups and Submersibles                                                    34%         29%              52%
     Inland Barges                                                               47%         24%              75%
                                                                     ---------------  ----------  ---------------
Segment Total (a)                                                                40%         27%              63%
                                                                     ---------------  ----------  ---------------

Total (a)                                                                        63%         57%              73%
                                                                     ===============  ==========  ===============

<FN>
     -----------------------

     (a)  Average  dayrates  and  utilization  figures  do  not include non-core
          assets, which consist of our platform rigs, mobile offshore production
          units  and  Venezuelan land rigs and lake barges, as well as for prior
          periods  our  service  vessels, which were sold prior to September 30,
          2002.
</TABLE>

     World  oil  and  U.S.  natural  gas prices have remained fairly stable this
year.  However,  the  pricing  environment  has not translated into a meaningful
increase  in  the  overall  demand for our drilling rigs. Despite the relatively
strong  commodity  prices  present  so far during 2002, we believe our customers
still  see  too much political and commercial uncertainty to materially increase
demand for drilling rigs in the near future. Consequently, on a global basis, we
do  not  foresee  substantive changes in the overall drilling rig demand through
the  first  quarter  of  2003.


                                       35
<PAGE>
     The  outlook for our ultra deepwater capable rigs continues to be good. All
of  these  rigs  are  currently  on  contract  and  dayrates on recently awarded
contracts  have  been  in  the  $165,000  to  $180,000  range.

     Rigs  with  water  depth  capability  of  between  4,000 to 6,000 feet have
significantly  more  competition  and  a  large  number  of  rigs  are generally
available  to be bid on any contract opportunity. These rigs are generally being
contracted  at  dayrates  in the $75,000 to $135,000 range depending on location
and  water  depth  capability.

     The  market  for  floaters  with  water  depth  capability below 4,000 feet
remains  significantly  oversupplied.  The  largest  market  for  these rigs has
traditionally  been  the  North Sea and Norway sectors of the North Sea, both of
which  have  experienced  substantial  reductions in activity. We presently have
seven  semisubmersibles  idle in the North Sea and see few prospects for them to
go  back to work in the next year. It will be difficult to keep all of our other
similar  units  in the North Sea fully utilized through the winter months and we
expect  to  see  some  idle  time  on  additional  rigs  during  this  period.

     The  international  jackup  market continues to be very good with most such
rigs  fully  utilized.  India  and  Mexico are both areas where we expect to see
continuing  demand  growth  for  jackups  which  should  keep  the  market  for
international  jackups  strong.

     The  Shallow  and  Inland  Water  barge  and jackup market segment activity
increased  somewhat  during the third quarter of 2002. While the improvement was
not  significant,  we  believe there are certain favorable conditions developing
within this sector, particularly the U.S. natural gas price fundamentals seen so
far during this year, the depletion rates of existing wells and the mobilization
of  a  number  of  jackups  to  other  market  sectors.

     The  contract  drilling market historically has been highly competitive and
cyclical,  and  we  are  unable  to  predict  the extent to which current market
conditions  will  continue.  A decline in oil or natural gas prices could reduce
demand  for our contract drilling services and adversely affect both utilization
and  dayrates.

     As  of  October  31,  2002,  approximately 78 percent and 44 percent of our
International  and  U.S.  Floater  Contract Drilling Services segment fleet days
were committed to for the remainder of 2002 and for the year 2003, respectively.
For our Gulf of Mexico Shallow and Inland Water segment, which has traditionally
operated  under short-term contracts, committed fleet days were approximately 20
percent  for the remainder of 2002 and none are currently committed for the year
2003.

     We  continue  to  proceed  with our previously announced plans to pursue an
initial public offering of our Gulf of Mexico Shallow and Inland Water business.
We  anticipate  completing  the  initial  public offering when market conditions
warrant,  subject  to  various  factors.  While  we believe we should be able to
complete  the  initial  public  offering  during 2003, given the current general
uncertainty  in  the equity markets, we are unsure when the transaction could be
completed  on  terms  acceptable  to  us.  See  "-Overview."

     The consolidated financial statements of R&B Falcon as a separate reporting
entity  will  be  included  in  the  initial public offering prospectus and will
include  various  items  specific  to  R&B  Falcon  that  are  eliminated in our
consolidated  financial  statements.  The  R&B  Falcon financial statements will
reflect  its  separate adoption of SFAS 142, including the implementation of the
initial  test for goodwill impairment utilizing the fair value of each reporting
unit  as  of  January  1,  2002  calculated  in  a  manner  consistent  with the
methodology  used  for  our initial impairment test. With respect to the Gulf of
Mexico  Shallow  and  Inland  Water  business  segment,  R&B Falcon will have an
initial  impairment  of  goodwill  consistent  with  that  reflected  in  our
consolidated  financial  statements  for  the  first  quarter of 2002, since the
entire  segment  is housed within R&B Falcon. Our International and U.S. Floater
Contract  Drilling  Services  segment (the "Floater segment") operates through a
number  of  its  subsidiaries, including R&B Falcon, which results in R&B Falcon
having  its own separate Floater segment.  Due to significant differences in the
composition  of R&B Falcon's Floater segment compared to our Floater segment and


                                       36
<PAGE>
other  factors  specific  to  R&B  Falcon,  there will be a $3.1 billion initial
goodwill  impairment  for R&B Falcon's Floater segment even though the same test
did not result in an initial impairment of goodwill in our Floater segment. This
initial impairment will have no effect on our consolidated financial statements.
The  initial impairment relating to both segments in R&B Falcon will be recorded
in  its  financial  statements  as  a  cumulative  effect  adjustment.

     As  of  September  30, 2002, the Company had goodwill of approximately $5.1
billion.  As required by SFAS 142 (See "-New Accounting Pronouncements"), we are
in  the  process  of  conducting  our  annual  test of goodwill impairment as of
October  1  of  this  year.  As a result of the decline in our stock price since
January 1, 2002, when the initial test under SFAS 142 was performed, we expect a
non-cash  impairment  to  goodwill  in the fourth quarter of 2002 representing a
significant majority of our current goodwill balance. The impairment is expected
to affect both our International and U.S. Floater Contract Drilling Services and
Gulf  of  Mexico Shallow and Inland Water business segments. Any such impairment
will  have  no  impact  on  our  bank  covenants.

     We conduct our worldwide operations through various subsidiaries and branch
offices.  Consequently,  we  are  subject  to  changes  in  tax  laws  and  the
interpretations of those tax laws in the jurisdictions in which we operate. This
includes  tax laws directed toward companies organized in jurisdictions with low
tax  rates.  A  material  change in the tax laws of any country in which we have
operations,  including  the U.S., could result in a higher effective tax rate on
our  worldwide  earnings.

     As  a  result  of  our  reorganization  in  May of 1999, we became a Cayman
Islands  company  in  a  transaction  commonly  referred  to  as an "inversion".
Currently  the  U.S.  House  and  Senate  are considering legislation that would
change  the  tax  law  applicable  to  companies  that  have completed inversion
transactions.  Certain  aspects  of the leading proposals, S. 2119 Reversing the
Expatriation  of  Profits Offshore Act passed by the Senate Finance Committee in
July  of  2002 and the American Competitiveness and Corporate Accountability Act
currently under consideration in the House Ways and Means Committee, may make it
more difficult to integrate acquired U.S. businesses with existing operations or
to  undertake  internal  restructuring  within the group. We can not provide any
assurance  as  to  what  form  final  legislation  will  take or the impact such
legislation  will  ultimately  have.

     Following  the  terrorist  attacks  on  September  11,  2001,  insurance
underwriters  increased  insurance  premiums  charged  for many of the coverages
historically  maintained  by  the  Company,  and the underwriters issued general
notices  of  cancellations  to  their  customers  for  war  risk,  terrorism and
political  risk  coverages with respect to a wide variety of insurance products,
including but not limited to, property damage, liability and aviation coverages.
Our  insurance  underwriters renegotiated substantially higher premium rates for
war  risk  coverage,  which can be canceled by the underwriters on short notice.
Our  directors and officers liability coverage was renewed in the second quarter
of  2002  with a substantial increase in premium. Our current property insurance
program  runs  through  the  end  of  2002  and the principal insurance programs
providing  our  occupational  injury  and illness coverages run through November
2002. Our total insurance expense is expected to be approximately $66 million in
2002.  We expect that our insurance expense could increase by 50 percent or more
in  2003.  We  are investigating alternatives that could mitigate these expected
cost  increases,  including  increasing  our  self-insured  retentions.

     We continue with our previously announced plans to sell a number of assets.
We  received $202 million of proceeds in 2001 and $66 million of proceeds during
the  first  nine  months  of  2002  from  the  sale  of  such  assets.


                                       37
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

     SOURCES  AND  USES  OF  CASH

<TABLE>
<CAPTION>
                                             Nine Months Ended
                                               September 30,
                                            -------------------
                                              2002       2001      Change
                                            ---------  --------  ----------
                                                     (In millions)
<S>                                         <C>        <C>       <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES
     Net income (loss)                      $ (951.2)  $ 196.6   $(1,147.8)
     Depreciation and amortization             374.1     461.7       (87.6)
     Non-cash items                          1,211.8    (176.0)    1,387.8
     Working capital                            65.5    (116.0)      181.5
                                            ---------  --------  ----------
                                            $  700.2   $ 366.3   $   333.9
                                            =========  ========  ==========
</TABLE>

     Cash  generated  from  net  income  items  adjusted  for  non-cash activity
increased  $152.4  million.  Cash  provided  by  working capital items increased
$181.5 million for the nine months ended September 30, 2002 compared to the same
period  in  2001  primarily  due to a reduction in accounts receivable resulting
from  improved  collections.

<TABLE>
<CAPTION>
                                        Nine Months Ended
                                          September 30,
                                        ------------------
                                          2002      2001     Change
                                        --------  --------  --------
                                               (In millions)
<S>                                     <C>       <C>       <C>
NET CASH USED IN INVESTING ACTIVITIES
     Capital expenditures               $(114.6)  $(443.1)  $ 328.5
     Proceeds from disposal of assets      73.6     108.4     (34.8)
     Merger costs paid                       -      (24.4)     24.4
     Proceeds from sale of securities        -       17.2     (17.2)
     R&B Falcon cash at acquisition          -      264.7    (264.7)
     Other, net                             4.6      13.0      (8.4)
                                        --------  --------  --------
                                        $ (36.4)  $ (64.2)  $  27.8
                                        ========  ========  ========
</TABLE>

     Net  cash  used in investing activities decreased for the nine months ended
September  30,  2002  as  compared  to the same period in the previous year as a
result  of  lower  capital  expenditures  due  to the completion of our newbuild
program  in  2001,  partially  offset by lower proceeds from asset sales for the
nine  months  ended  September 30, 2002 and cash received in connection with the
R&B  Falcon  merger  during  the  nine  months  ended  September  30,  2001.

<TABLE>
<CAPTION>
                                                       Nine Months Ended
                                                         September 30,
                                                      --------------------
                                                        2002       2001       Change
                                                      --------  ----------  ----------
                                                               (In millions)
<S>                                                   <C>       <C>         <C>
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
     Net repayments on revolving credit agreements    $    -    $  (180.1)  $   180.1
     Net repayments under commercial paper program     (326.4)         -       (326.4)
     Repayments on other debt instruments              (154.3)   (1,500.1)    1,345.8
     Net proceeds from issuance of debt                    -      1,693.5    (1,693.5)
     Other, net                                         (14.7)        1.1       (15.8)
                                                      --------  ----------  ----------
                                                      $(495.4)  $    14.4   $  (509.8)
                                                      ========  ==========  ==========
</TABLE>


                                       38
<PAGE>
     During the nine months ended September 30, 2002, we had no borrowings under
our  revolving  credit  agreements  and we repaid the $326.4 million outstanding
under  our  commercial  paper  program.  The  decrease  in  repayments  of  debt
instruments  of  $1,345.8  million was primarily due to repayments of R&B Falcon
debt instruments totaling $1,458.0 million in the second quarter of 2001 as more
fully described in Note 4 to our condensed consolidated financial statements. In
the  nine  months  ended September 30, 2002, we made early repayments of secured
rig  financing  on  the Trident IX and Trident 16 of $50.6 million and scheduled
debt  payments of $103.7 million. The increase in cash used in other, net mainly
reflects  $8.3  million in consent payments related to the exchange of our notes
for  R&B  Falcon  notes, no exercise of warrants in 2002 and lower proceeds from
stock  option  exercises in 2002, partially offset by the discontinuance of cash
dividend  payments  after  the  second quarter of 2002. In the second quarter of
2001, we received net proceeds of $1,693.5 million primarily due to the issuance
of  the  6.625%  Notes,  7.5%  Notes  and  1.5%  Convertible  Debentures.

     CAPITAL  EXPENDITURES

     Capital  expenditures  totaled  $114.6 million during the nine months ended
September 30, 2002. In both 2002 and 2003, we expect to spend approximately $150
million  on  our  existing fleet, corporate infrastructure and major upgrades to
the  Deepwater  Expedition.  A  substantial majority of our capital expenditures
relates  to  the  International  and  U.S.  Floater  Contract  Drilling Services
segment.

     We  intend  to  fund  the  cash  requirements  relating  to  our  capital
expenditures through available cash balances, cash generated from operations and
asset  sales.  We  also  have  available  borrowings  under our revolving credit
agreements  and  commercial  paper program (see "-Sources of Liquidity") and may
engage  in  other  commercial  bank  or  capital  market  financings.

     ACQUISITIONS  AND  DISPOSITIONS

     From  time  to  time,  we  review  possible  acquisitions of businesses and
drilling  units  and  may in the future make significant capital commitments for
such  purposes.  Any  such  acquisition  could  involve  the  payment by us of a
substantial amount of cash or the issuance of a substantial number of additional
ordinary  shares  or  other securities. We would likely fund the cash portion of
any such acquisition through cash balances on hand, the incurrence of additional
debt,  sales  of  assets,  ordinary  shares or other securities or a combination
thereof.  In  addition,  from time to time, we review possible dispositions. See
"-Outlook."

     In July 2002, our International and U.S. Floater Contract Drilling Services
segment sold an office building for net proceeds of $3.0 million, resulting in a
net  after-tax  loss  of  $0.3  million.

     In  July  2002,  our Gulf of Mexico Shallow and Inland Water segment sold a
land rig for net proceeds of $2.1 million. No gain or loss was recognized on the
sale.

     In June 2002, our International and U.S. Floater Contract Drilling Services
segment  sold  a jackup rig, the RBF 209, and recognized a net after-tax loss of
$1.5  million.

     In  March  2002,  our  International  and  U.S.  Floater  Contract Drilling
Services segment sold two semisubmersible rigs, the Transocean 96 and Transocean
97,  for net proceeds of $30.7 million, resulting in net after-tax gains of $1.3
million.

     During  the  nine  months  ended  September  30,  2002,  we also settled an
insurance  claim and sold certain other non-strategic assets acquired in the R&B
Falcon  merger  and  certain  other  assets  held  for  sale for net proceeds of
approximately  $20.4  million,  resulting in net after-tax gains of $2.3 million
and  $0.5  million  in  our  International  and  U.S.  Floater Contract Drilling
Services  and  Gulf  of  Mexico Shallow and Inland Water segments, respectively.


                                       39
<PAGE>
     SOURCES  OF  LIQUIDITY

     Our primary sources of liquidity in the third quarter of 2002 were our cash
flows from operations and asset sales. Primary uses of cash were debt repayments
and capital expenditures. At September 30, 2002, we had $1.0 billion in cash and
cash  equivalents.

     We  anticipate  that we will rely primarily upon existing cash balances and
internally  generated cash flows to maintain liquidity in 2002 and 2003, as cash
flows  from  operations  are expected to be positive and, together with existing
cash  balances,  adequate to fulfill anticipated obligations. From time to time,
we  may also use bank lines of credit and commercial paper to maintain liquidity
for  short-term  cash  needs.

     We intend to use cash from operations primarily to pay debt as it comes due
and  to  fund  capital expenditures. If we seek to reduce our debt through other
than scheduled maturities, we could do so through repurchases or redemptions of,
or  tender  offers  for,  debt securities. We have significantly reduced capital
expenditures  compared  to  prior  years  due  to the completion of our newbuild
program in 2001. During the first nine months of 2002, we have reduced net debt,
defined  as  total  debt less swap receivables and cash and cash equivalents, by
$647  million.

     Our  internally generated cash flow is directly related to our business and
the  market segments in which we operate. Should the drilling market deteriorate
further,  or should we experience poor results in our operations, cash flow from
operations  may  be  reduced.  To  date,  however, we have continued to generate
positive  cash  flow  from  operations.

     We  have access to $800 million in bank lines of credit under two revolving
credit  agreements.  A  364-day  revolving  credit  agreement  provides for $250
million in borrowings and will expire in December 2002 and a five-year revolving
credit  agreement  provides  for  $550  million in borrowings and will expire in
December  2005.  We  expect  to renew the $250 million, 364-day revolving credit
agreement  in  December  2002. These credit lines are used primarily to back our
$800  million  commercial paper program and may also be drawn on directly. As of
September  30, 2002, none of the credit line capacity was utilized, leaving $800
million  of  availability  under  the  bank lines of credit for commercial paper
issuance  or  drawdowns.

     The  bank  credit  lines  require  compliance  with  various  covenants and
provisions  customary  for  agreements  of  this  nature,  including an interest
coverage  ratio of not less than 3 to 1, a leverage ratio of not greater than 40
percent  (excluding the impact of SFAS 142 goodwill impairments) and limitations
on mergers and sale of substantially all assets, creating liens, incurring debt,
transactions  with affiliates and sale/leaseback transactions. Should we fail to
comply with these covenants, we would be in default and may lose access to these
facilities.  A loss of the bank facilities would also cause us to lose access to
the commercial paper markets. We are also subject to various covenants under the
indentures  pursuant to which our public debt was issued, including restrictions
on  creating  liens,  engaging  in  sale/leaseback  transactions and engaging in
merger, consolidation or reorganization transactions. A default under our public
debt  could trigger a default under our credit lines and cause us to lose access
to  these facilities. See Note 8 to our consolidated financial statements in our
Annual  Report  on  Form  10-K  for  the  year  ended  December  31,  2001 for a
description  of  our  credit  agreements  and  debt  securities.

     We  intend to use the proceeds from the initial public offering of our Gulf
of  Mexico  Shallow  and  Inland Water business as well as any proceeds from our
previously  announced  plans  to  sell  a  number  of assets (see "-Outlook") to
further  reduce  our  debt  balances.

     In  April  2001,  the  Securities  and Exchange Commission ("SEC") declared
effective our shelf registration statement on Form S-3 for the proposed offering
from  time  to  time  of  up  to  $2.0  billion  in  gross proceeds of senior or
subordinated debt securities, preference shares, ordinary shares and warrants to
purchase  debt  securities,  preference  shares,  ordinary  shares  or  other
securities.  In May 2001, we issued $400.0 million aggregate principal amount of
1.5%  Convertible  Debentures  due  May  15,  2021  under the shelf registration
statement.  At  October  31,  2002, $1.6 billion in gross proceeds of securities
remained  unissued  under  the  shelf  registration  statement.


                                       40
<PAGE>
     Our  access  to commercial paper, debt and equity markets may be reduced or
closed  to us due to a variety of events, including, among others, downgrades of
ratings  of our debt and commercial paper, industry conditions, general economic
conditions,  market  conditions  and  market perceptions of us and our industry.

     Our contractual obligations in the table below include our debt obligations
at  face  value.

<TABLE>
<CAPTION>
                                       For the twelve months ending September 30,
                               --------------------------------------------------------
                                Total     2003   2004 - 2005   2006 - 2007   Thereafter
                               --------  ------  ------------  ------------  ----------
<S>                            <C>       <C>     <C>           <C>           <C>
                                                 (In millions)
     CONTRACTUAL OBLIGATIONS
     Debt                      $4,511.0  $961.5  $      749.5  $      500.0  $  2,300.0
                               ========  ======  ============  ============  ==========
</TABLE>

     The  bondholders  may  put  back  to the Company, at their option, the Zero
Coupon Convertible Debentures due 2020, the 1.5% Convertible Debentures due 2021
and the 7.45% Notes due 2027 in May 2003, May 2006 and April 2007, respectively.
With  regard to both series of the Convertible Debentures, we have the option to
pay the repurchase price in cash, ordinary shares or any combination of cash and
ordinary  shares.  The  chart above assumes that the holders of these debentures
and  notes  exercise  the options at the first available date. Should all of the
bondholders  of the Zero Coupon Convertible Debentures exercise their put option
in  May  2003 we would recognize additional expense of approximately $11 million
to fully amortize the remaining debt issue costs related to these debentures. We
are  also required to repurchase the convertible debentures at the option of the
holder  at  other  later  dates  as  more  fully  described  in  Note  8  to our
consolidated financial statements in our Annual Report on Form 10-K for the year
ended December 31, 2001.

     We  have  certain  operating leases that have been previously discussed and
reported in our Annual Report on Form 10-K for the year ended December 31, 2001.
There  have  been  no  material  changes  in  these  previously reported leases.

     At  September  30, 2002, we had other commitments that we are contractually
obligated  to  fulfill  with  cash  should  the  obligations  be  called.  These
obligations included standby letters of credit and surety bonds, which guarantee
our  performance  as  it  relates  to our drilling contracts, insurance, tax and
other obligations in various jurisdictions. Letters of credit are issued under a
number  of  facilities  provided  by several banks. The obligations that are the
subject  of  these  surety  bonds  are geographically concentrated in Brazil and
Nigeria.  These  letters  of credit and surety bond obligations are not normally
called  as we typically comply with the underlying performance requirements. The
table  below  includes a summary of these obligations in U.S. dollar equivalents
and their time to expiration. It should be noted that these obligations could be
called  at  any  time  prior  to  the  expiration  dates.

<TABLE>
<CAPTION>
                                                  For the twelve months ending September 30,
                                            -----------------------------------------------------
                                            Total    2003   2004 - 2005   2006 - 2007  Thereafter
                                            ------  ------  ------------  -----------  ----------
<S>                                         <C>     <C>     <C>           <C>          <C>
                                                               (In millions)
OTHER COMMERCIAL COMMITMENTS
Standby Letters of Credit                   $ 53.7  $ 47.2  $        6.5          -           -
Surety Bonds                                 207.1   143.7          63.4          -           -
Purchase Option Guarantees - Joint Ventures  191.3     -           191.3          -           -
Other Commitments                              1.5     -             1.5          -           -
                                            ------  ------  ------------  -----------  ----------
     Total                                  $453.6  $190.9  $      262.7          -           -
                                            ======  ======  ============  ===========  ==========
</TABLE>

     In  March  2002,  we  completed  an  exchange  offer  pursuant to which R&B
Falcon's  6.5%  Notes  due April 15, 2003, 6.75% Notes due April 15, 2005, 6.95%
Notes  due  April  15,  2008,  7.375% Notes due April 15, 2018, 9.125% Notes due
December  15,  2003  and 9.5% Notes due December 15, 2008 whose holders accepted
the  offer  were exchanged for newly issued Transocean notes. The new notes were
issued  in  six  series  corresponding to the six series of R&B Falcon notes and
have  the same principal amount, interest rate, redemption terms and payment and
maturity  dates  as  the corresponding series of R&B Falcon notes. The aggregate
principal amount of the new notes issued was approximately $1.4 billion. Because
the  holders  of a majority in principal amount of each of these series of notes
consented  to  the  proposed  amendments to the applicable indenture pursuant to


                                       41
<PAGE>
which  the notes were issued, some covenants, restrictions and events of default
were  eliminated  from the indentures with respect to these series of notes. The
notes  not  exchanged remain an obligation of R&B Falcon. In connection with the
exchange  offers,  an  aggregate of $8.3 million in consent payments was made by
R&B  Falcon  to  holders  of  R&B  Falcon  notes  whose  notes  were  exchanged.

DERIVATIVE  INSTRUMENTS

     We have established policies and procedures for derivative instruments that
have  been  approved  by  our  Board of Directors. These policies and procedures
provide  for the prior approval of derivative instruments by our Chief Financial
Officer.  From time to time, we may enter into a variety of derivative financial
instruments in connection with the management of our exposure to fluctuations in
foreign  exchange  rates  and  interest  rates.  We do not enter into derivative
transactions for speculative purposes; however, for accounting purposes, certain
transactions  may  not  meet  the  criteria  for  hedge  accounting.

     As  more  fully described in Note 7 to our condensed consolidated financial
statements,  we  are  a party to interest rate swap agreements with an aggregate
notional  amount  of  $1.6  billion.  At  September  30,  2002, the value of our
outstanding  derivatives  was  a net asset of $191.8 million and was included in
other  assets  in  the  condensed  consolidated  balance  sheets.

     DD  LLC,  an  unconsolidated  subsidiary  in  which  we  have  a 50 percent
ownership  interest,  has entered into interest rate swaps with aggregate market
values  netting  to  a  liability  of  $8.2  million  at September 30, 2002. Our
interest  in  these swaps was included in accumulated other comprehensive income
with a corresponding reduction to investments in and advances to joint ventures.

SPECIAL  PURPOSE  ENTITIES,  SALE/LEASEBACK  TRANSACTION  AND  RELATED  PARTY
TRANSACTIONS

     We  have  transactions  with  certain  special purpose entities and related
parties  and  we  are  party to a sale/leaseback transaction. These transactions
have  all  been  previously  discussed and reported in our Annual Report on Form
10-K  for  the  year  ended  December  31,  2001.  There  have  been no material
developments  in  these  previously  reported  transactions.

NEW  ACCOUNTING  PRONOUNCEMENTS

     In  July  2001,  the  FASB  issued  SFAS 142, Goodwill and Other Intangible
Assets,  which  is effective for fiscal years beginning after December 15, 2001.
Under  SFAS  142,  goodwill  and  intangible assets with indefinite lives are no
longer  amortized  but  are  reviewed  at  least  annually  for  impairment. The
amortization  provisions  of  SFAS  142  apply to goodwill and intangible assets
acquired  after  June  30,  2001. With respect to goodwill and intangible assets
acquired  prior  to  July 1, 2001, we adopted SFAS 142 effective January 1, 2002
and  will perform a test of impairment as of October 1 each year. In conjunction
with  the  adoption  of  this  statement,  we  discontinued  the amortization of
goodwill.  Application  of  the  non-amortization  provisions  of  SFAS  142 for
goodwill  is  expected  to  result  in  an  increase  in  operating  income  of
approximately  $155  million  in  2002. See Note 2 to our condensed consolidated
financial  statements.

     In  August  2001,  the  FASB  issued SFAS 144, Accounting for Impairment or
Disposal  of  Long-Lived  Assets.  SFAS  144 supersedes SFAS 121, Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and
the  accounting  and reporting provisions of Accounting Principles Board Opinion
("APB")  30,  Reporting  the  Results  of  Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring  Events  and Transactions. SFAS 144 retains the fundamental provisions
of  SFAS  121 for recognition and measurement of long-lived asset impairment and
for the measurement of long-lived assets to be disposed of by sale and the basic
requirements  of  APB  30. In addition to these fundamental provisions, SFAS 144
provides guidance for determining whether long-lived assets should be tested for
impairment  and  specific  criteria  for classifying assets to be disposed of as
held  for  sale.  The  statement  is  effective for fiscal years beginning after
December  15, 2001. We adopted the statement as of January 1, 2002. The adoption
of  this statement had no material effect on our consolidated financial position
or  results  of  operations.  See Note 9 to our condensed consolidated financial
statements.


                                       42
<PAGE>
     In  April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No.
4,  44,  and  64, Amendment of FASB Statement No. 13, and Technical Corrections.
This statement eliminates the requirement under SFAS 4 to aggregate and classify
all  gains  and losses from extinguishment of debt as an extraordinary item, net
of  related  income  tax  effect.  This statement also amends SFAS 13 to require
certain  lease  modifications  with  economic  effects similar to sale-leaseback
transactions be accounted for in the same manner as sale-leaseback transactions.
In addition, SFAS 145 requires reclassification of gains and losses in all prior
periods  presented  in  comparative  financial  statements  related  to  debt
extinguishment  that  do not meet the criteria for extraordinary item in APB 30.
The  statement  is  effective for fiscal years beginning after May 15, 2002 with
early  adoption encouraged. We will adopt SFAS 145 effective January 1, 2003. We
do  not  expect  adoption  of  this  statement  to have a material effect on our
consolidated  financial  position  or  results  of  operations.

     In  July  2002,  the  FASB  issued  SFAS  146,  Obligations Associated with
Disposal  Activities, which is effective for disposal activities initiated after
December  15,  2002,  with  early  application  encouraged.  SFAS  146 addresses
financial  accounting  and  reporting for costs associated with exit or disposal
activities  and  nullifies  Emerging Issues Task Force Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including  Certain  Costs  Incurred  in a Restructuring).  Under this
statement,  a  liability for a cost associated with an exit or disposal activity
would  be  recognized  and measured at its fair value when it is incurred rather
than  at  the  date of commitment to an exit plan. Under SFAS 146, severance pay
would  be  recognized  over  time  rather  than  up  front  provided the benefit
arrangement  requires  employees  to  render  future  service  beyond  a minimum
retention  period,  which would be based on the legal notification period, or if
there  is  no  such  requirement,  60  days,  thereby allowing a liability to be
recorded  over  the  employees'  future  service  period. We will adopt SFAS 146
effective  with disposal activities initiated after December 15, 2002. We do not
expect  adoption of this statement to have a material effect on our consolidated
financial  position  or  results  of  operations.

FORWARD-LOOKING  INFORMATION

     The statements included in this quarterly report regarding future financial
performance  and  results  of  operations  and  other  statements  that  are not
historical  facts  are  forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of  1934. Statements to the effect that the Company or management "anticipates,"
"believes,"  "budgets," "estimates," "expects," "forecasts," "intends," "plans,"
"predicts,"  or "projects" a particular result or course of events, or that such
result  or  course  of  events  "could," "might," "may," "scheduled" or "should"
occur,  and  similar  expressions, are also intended to identify forward-looking
statements. Forward-looking statements in this quarterly report include, but are
not  limited  to,  statements  involving  the  costs and timing of restructuring
plans,  potential  revenues,  expenses,  customer  drilling programs, supply and
demand,  utilization  rates,  dayrates,  market  outlooks  for  our  various
geographical  operating  sectors,  rig  classes  and  business  segments,  the
disposition  of  the  Company's Gulf of Mexico Shallow and Inland Water business
(including  the timing of the offering and portion sold), impairment of goodwill
and  related  accounting  matters  of  R&B Falcon, planned asset sales, expected
capital  expenditures, results and effects of legal proceedings, liabilities for
tax  issues, increases in insurance premiums, liquidity, positive cash flow from
operations,  the  exercise  of  the option of holders of Zero Coupon Convertible
Debentures,  the  1.5% Convertible Debentures and the 7.45% Notes to require the
Company  to  repurchase  the  instruments,  adequacy  of  cash  flow  for future
obligations,  effects  of  accounting  changes  and  the  effect  of  proposed
legislation.  Such  statements  are subject to numerous risks, uncertainties and
assumptions,  including,  but  not limited to, worldwide demand for oil and gas,
uncertainties  relating  to  the  level  of  activity  in  offshore  oil and gas
exploration  and  development,  exploration  success  by  producers, oil and gas
prices  (including U.S. natural gas prices), fair market value of assets, demand
for  offshore  and  inland  water rigs, competition and market conditions in the
contract drilling industry, our ability to successfully integrate the operations
of  acquired  businesses,  delays or terminations of drilling contracts due to a
number  of events, delays or cost overruns on construction and shipyard projects
and  possible  cancellation  of  drilling  contracts  as  a  result of delays or
performance,  our  ability  to enter into and the terms of future contracts, the
availability  of  qualified  personnel,  labor  relations  and  the  outcome  of
negotiations  with unions representing workers, operating hazards, political and


                                       43
<PAGE>
other  uncertainties  inherent  in  non-U.S.  operations (including exchange and
currency  fluctuations),  risks  of  war,  terrorism  and  cancellation  or
unavailability  of  certain  insurance  coverage,  securities market conditions,
application  of  accounting  rules,  the  impact  of  governmental  laws  and
regulations,  the  final  provisions  of any inversion and other legislation (if
any),  the  adequacy  of  sources  of  liquidity,  the  effect of litigation and
contingencies  and other factors discussed in our Annual Report on Form 10-K for
the  year  ended  December  31, 2001 and in the Company's other filings with the
SEC,  which  are  available  free of charge on the SEC's website at www.sec.gov.
Should  one  or  more  of  these  risks  or uncertainties materialize, or should
underlying  assumptions prove incorrect, actual results may vary materially from
those  indicated.  You  should  not  place  undue  reliance  on  forward-looking
statements.  Each  forward-looking  statement  speaks only as of the date of the
particular  statement,  and  we  undertake  no  obligation to publicly update or
revise  any  forward-looking  statements.


                                       44
<PAGE>
ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

INTEREST  RATE  RISK

     Our exposure to market risk for changes in interest rates relates primarily
to  our  long-term  and  short-term  debt  obligations. The table below presents
scheduled  debt  maturities and related weighted-average interest rates for each
of  the twelve month periods ending September 30 relating to debt obligations as
of  September  30,  2002. Weighted-average variable rates are based on estimated
LIBOR  rates  as  of  September  30,  2002,  plus  applicable  margins.

     As of September 30, 2002 (in millions, except interest rate percentages):

<TABLE>
<CAPTION>
                                             Scheduled Maturity Date (a) (b)                        Fair Value
                               --------------------------------------------------------------------  --------
                                2003     2004     2005     2006     2007     Thereafter     Total    9/30/02
                               -------  -------  -------  -------  -------  ------------  ---------  --------
<S>                            <C>      <C>      <C>      <C>      <C>      <C>           <C>        <C>
Total debt
  Fixed Rate                   $824.0   $130.9   $ 81.1   $400.0   $100.0      $1,050.0   $2,586.0   $2,692.6
     Average interest rate        4.1%     8.5%     8.6%     1.5%     7.5%          7.6%       5.6%
  Variable Rate                $137.5   $150.0   $ 37.5      -        -             -     $  325.0   $  325.0
     Average interest rate        2.6%     2.6%     2.6%     -        -             -          2.6%
  Receive Fixed/Pay Variable
    Swaps (c)                     -        -     $350.0      -        -        $1,250.0   $1,600.0   $1,794.8
     Average interest rate        -        -        4.7%     -        -             3.6%       3.8%

<FN>
--------------------------
(a)     Maturity  dates  of  the  face value of the Company's debt assumes the put options on the Zero Coupon
        Convertible  Debentures,  1.5% Convertible Debentures and 7.45% Notes will be exercised in May 2003,
        May 2006 and  April  2007,  respectively.
(b)     Expected maturity amounts are based on the face value of debt and do not reflect fair market value of
        debt.
(c)     The  6.625%,  6.75%,  6.95%  and  9.5% Notes are considered variable as a result of the interest rate
        swaps.  See  Note  7  to  our  condensed  consolidated  financial  statements.
</TABLE>

     At  September  30, 2002, we had approximately $1.9 billion of variable rate
debt  at  face  value (43 percent of total debt at face value). Of that variable
rate  debt,  $1.6  billion  resulted from interest rate swaps with the remainder
representing  term  bank  debt. Given outstanding amounts as of that date, a one
percent  rise  in  interest  rates  would result in an additional $18 million in
interest  expense  per  year.  Offsetting  this, a large part of our investments
would  earn  commensurately  higher  rates  of  return. Using September 30, 2002
investment  levels,  a  one  percent  increase in interest rates would result in
approximately  $10  million  of  additional  interest  income per year. Based on
September  30,  2002  balances,  our  net  variable  debt balance at face value,
defined  as  variable  rate  debt  less  swap  receivables  and  cash  and  cash
equivalents,  totaled $711 million (22 percent of net total debt at face value).

FOREIGN  EXCHANGE  RISK

     The  Company's exposure to foreign exchange risk has not materially changed
since  December  31,  2001.


                                       45
<PAGE>
ITEM  4.  CONTROLS  AND  PROCEDURES

     Within  the  90  days prior to the date of this report, the Company carried
out  an  evaluation,  under  the  supervision  and with the participation of the
Company's  management, including the Chief Executive Officer and Chief Financial
Officer,  of  the  effectiveness  of  the  design and operation of the Company's
disclosure  controls  and procedures pursuant to Exchange Act Rule 13a-14. Based
on  that evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting them to material information relating to the Company (including
its consolidated subsidiaries) required to be included in the Company's periodic
SEC  filings.  Subsequent  to  the  date  of  their  evaluation,  there  were no
significant  changes in the Company's internal controls or in other factors that
could  significantly  affect  the  internal  controls,  including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.


                                       46
<PAGE>
PART  II  -  OTHER  INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

     In  November  1988,  a lawsuit was filed in the U.S. District Court for the
Southern  District  of  West Virginia against Reading & Bates Coal Co., a wholly
owned  subsidiary  of  R&B Falcon, by SCW Associates, Inc. claiming breach of an
alleged  agreement  to  purchase the stock of Belva Coal Company, a wholly owned
subsidiary  of  Reading  & Bates Coal Co. with coal properties in West Virginia.
When  those coal properties were sold in July 1989 as part of the disposition of
R&B Falcon's coal operations, the purchasing joint venture indemnified Reading &
Bates  Coal  Co.  and  R&B Falcon against any liability Reading & Bates Coal Co.
might  incur  as  a  result of this litigation.  A judgment for the plaintiff of
$32,000  entered in February 1991 was satisfied and Reading & Bates Coal Co. was
indemnified  by  the  purchasing  joint  venture.  On  October  31,  1990,  SCW
Associates, Inc., the plaintiff in the above-referenced action, filed a separate
ancillary action in the Circuit Court, Kanawha County, West Virginia against R&B
Falcon,  Caymen  Coal, Inc. (the former owner of R&B Falcon's West Virginia coal
properties),  as  well as the joint venture, Mr. William B. Sturgill (the former
President  of  Reading  &  Bates  Coal Co.) personally, three other companies in
which  we  believe  Mr.  Sturgill holds an equity interest, two employees of the
joint  venture,  First  National  Bank of Chicago and First Capital Corporation.
The  lawsuit  sought to recover compensatory damages of $50 million and punitive
damages  of  $50  million for alleged tortuous interference with the contractual
rights  of  the  plaintiff and to impose a constructive trust on the proceeds of
the  use  and/or  sale  of  the  assets  of Caymen Coal, Inc. as they existed on
October  15, 1988.  The lawsuit was settled in August 2002, and the terms of the
settlement  have been reflected in our results of operations for the nine months
ended September 30, 2002.  The settlement did not have a material adverse effect
on  our  business  or  consolidated  financial  position.

     We  also  have  certain  other  actions  or  claims  pending that have been
previously discussed and reported in our Annual Report on Form 10-K for the year
ended  December  31,  2001  and  Quarterly Reports on Form 10-Q for the quarters
ended  March  31,  2002  and  June  30,  2002.  There  have  been  no  material
developments  in these previously reported matters.  We are involved in a number
of  other  lawsuits,  all  of  which  have  arisen in the ordinary course of our
business.  We do not believe that the ultimate liability, if any, resulting from
any  such  other  pending  litigation will have a material adverse effect on our
business  or  consolidated  financial  position.

     We  cannot  predict  with  certainty  the  outcome  or effect of any of the
litigation  matters  specifically  described  above or of any such other pending
litigation.  There  can  be  no assurance that our beliefs or expectations as to
the  outcome  or  effect  of  any  lawsuit or other litigation matter will prove
correct  and  the eventual outcome of these matters could materially differ from
management's  current  estimates.


                                       47
<PAGE>
ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)     Exhibits

The following exhibits are filed in connection with this Report:

NUMBER    DESCRIPTION
------    -----------

*2.1      Agreement  and Plan of Merger dated as of August 19, 2000 by and among
          Transocean  Inc.,  Transocean Holdings Inc., TSF Delaware Inc. and R&B
          Falcon  Corporation (incorporated by reference to Annex A to the Joint
          Proxy  Statement/Prospectus  dated  October  30,  2000  included  in a
          424(b)(3)  prospectus  filed  by  the  Company  on  November  1, 2000)

*3.1      Memorandum of Association of Transocean Inc., as amended (incorporated
          by  reference to Annex E to the Joint Proxy Statement/Prospectus dated
          October  30,  2000  included  in  a  424(b)(3) prospectus filed by the
          Company  on  November  1,  2000)

*3.2      Articles  of  Association of Transocean Inc., as amended (incorporated
          by  reference to Annex F to the Joint Proxy Statement/Prospectus dated
          October  30,  2000  included  in  a  424(b)(3) prospectus filed by the
          Company  on  November  1,  2000)

*3.3      Certificate  of  Incorporation  on  Change  of Name to Transocean Inc.
          (incorporated  by  reference to Exhibit 3.3 to the Company's Quarterly
          Report  filed  on Form 10-Q for the quarter ended June 30, 2002)

*10.1     Employment  Agreement  dated  July  15,  2002  by and among R&B Falcon
          Corporation,  R&B  Falcon  Management  Services,  Inc.,  and  Jan Rask
          (incorporated  by reference to Exhibit 10.1 to the Company's Quarterly
          Report  filed  on  Form  10-Q  for  the  quarter  ended June 30, 2002)

*10.2     Separation  Agreement  dated  as  of  July  23,  2002  by  and between
          Transocean  Offshore  Deepwater  Drilling  Inc.  and  Jon  C.  Cole
          (incorporated  by reference to Exhibit 10.2 to the Company's Quarterly
          Report  filed  on  Form  10-Q  for  the  quarter  ended June 30, 2002)

*10.3     Agreement  dated  October  10,  2002  by  and  among  Transocean Inc.,
          Transocean  Offshore  Deepwater  Drilling  Inc. and J. Michael Talbert
          (incorporated  by  reference  to Exhibit 99.2 to the Company's Current
          Report  dated  October  10,  2002  on  Form  8-K)

*10.4     Amendment  to  Consulting Agreement between  Transocean  Offshore Inc.
          (now  known  as  Transocean Inc.) and Victor E. Grijalva dated October
          10,  2002  (incorporated by reference to Exhibit 99.3 to the Company's
          Current  Report  dated  October  10,  2002  on  Form  8-K)

*10.5     Agreement  dated  May  9,  2002  by  and  among  Transocean  Offshore
          Deepwater  Drilling Inc. and Robert L. Long (incorporated by reference
          to Exhibit 99.4 to the Company's Current Report dated October 10, 2002
          on  Form  8-K)

---------------------------
*  Incorporated  by  reference  as  indicated.

     (b)     Reports  on  Form  8-K

     The  Company  filed  a  Current  Report  on  Form  8-K  on  July  30,  2002
(information  furnished  not  filed)  announcing that the updated "Monthly Fleet
Report"  was available on the Company's website, a Current Report on Form 8-K on
August 13, 2002 (information furnished not filed) announcing that certifications


                                       48
<PAGE>
by  the  Company's  chief executive officer and chief financial officer had been
submitted  pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of  2002 in
correspondence  to  the  Securities  and  Exchange  Commission  accompanying the
Company's  quarterly report on Form 10-Q, a Current Report on Form 8-K on August
14,  2002  (information furnished not filed) announcing that sworn statements by
the  Company's  chief  executive  officer  and  chief financial officer had been
submitted  in  compliance  with  Order  No. 4-460 of the Securities and Exchange
Commission,  a  Current  Report  on  Form  8-K  on  August 16, 2002 (information
furnished  not  filed) announcing the Company's view of supply/demand, committed
fleet  days, the effect of a change in dayrate assumption on earnings per share,
unaudited  operating  results  for  the  first six months of 2002, and estimated
capital  expenditures  for  2002  through  2004, a Current Report on Form 8-K on
August  30,  2002  (information furnished not filed) announcing that the updated
"Monthly  Fleet Report" was available on the Company's website, a Current Report
on  Form  8-K  on September 3, 2002 (information furnished not filed) announcing
the  Company's  view  of supply/demand, committed fleet days and the effect of a
change in dayrate assumption on earnings per share, and a Current Report on Form
8-K  on September 30, 2002 (information furnished not filed) announcing that the
updated  "Monthly  Fleet  Report"  was  available  on  the  Company's  website.


                                       49
<PAGE>
SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the  registrant  has duly caused this report to be signed on its
behalf  by  the  undersigned,  hereunto  duly  authorized, on November 12, 2002.

TRANSOCEAN  INC.



By:  /s/  Gregory  L.  Cauthen
     ---------------------------------------
     Gregory  L.  Cauthen
     Senior Vice President, Chief Financial Officer
       and  Treasurer
     (Principal  Financial  Officer)



By:  /s/  Ricardo  H.  Rosa
     ---------------------------------------
     Ricardo  H.  Rosa
     Vice  President  and  Controller
     (Principal  Accounting  Officer)


                                       50
<PAGE>
                                 CERTIFICATIONS

                           Principal Executive Officer
                           ---------------------------

I, Robert L. Long, certify that:

1.   I  have  reviewed  this  quarterly report on Form 10-Q of Transocean, Inc.;

2.   Based  on  my  knowledge, this quarterly report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  quarterly  report,  fairly  present in all
     material  respects  the financial condition, results of operations and cash
     flows  of  the  registrant  as  of,  and for, the periods presented in this
     quarterly  report;

4.   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

     b)   Evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

     c)   Presented  in  this  quarterly  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other certifying officers and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  function):

     a)   All  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

     b)   Any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report whether or not there were significant changes in internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

       Date:  November 12, 2002            /s/  Robert  L.  Long
                                           ------------------------------------
                                           Robert  L.  Long
                                           President and Chief Executive Officer

                                       51
<PAGE>

                           Principal Financial Officer
                           ---------------------------

I, Gregory L. Cauthen, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Transocean, Inc.;

2.   Based  on  my  knowledge, this quarterly report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  quarterly  report,  fairly  present in all
     material  respects  the financial condition, results of operations and cash
     flows  of  the  registrant  as  of,  and for, the periods presented in this
     quarterly  report;

4.   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

     b)   Evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

     d)   Presented  in  this  quarterly  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other certifying officers and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  function):

     a)   All  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

     b)   Any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report whether or not there were significant changes in internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

       Date:  November 12, 2002            /s/  Gregory  L. Cauthen
                                           ------------------------------------
                                           Gregory  L.  Cauthen
                                           Senior Vice President, Chief
                                           Financial Officer and Treasurer


                                       52
<PAGE>